UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended ~~March 31,~~September 30, 2023


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from to

Commission File Number: 000-10436

L.B. Foster Company

(Exact name of registrant as specified in its charter)


Pennsylvania						25-1324733
(State of Incorporation)						(I. R. S. Employer Identification No.)


415 Holiday Drive, Suite 100, Pittsburgh, Pennsylvania						15220
(Address of principal executive offices)						(Zip Code)

(412) 928-3400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01

FSTR

NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer ☐

Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~May 2,~~November 1, 2023, there were ~~11,085,149~~11,076,168 shares of the registrant’s common stock, par value $0.01 per share, outstanding.

L.B. FOSTER COMPANY AND SUBSIDIARIES

INDEX


			Page
PART I. Financial Information

Item 1. Financial Statements:

Condensed Consolidated Balance Sheets			3

Condensed Consolidated Statements of Operations			4

Condensed Consolidated Statements of Comprehensive ~~Loss~~(Loss) Income			5

Condensed Consolidated Statements of Cash Flows			6

Condensed Consolidated Statements of Stockholders’ Equity			7

Notes to Condensed Consolidated Financial Statements			810

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			1721

Item 3. Quantitative and Qualitative Disclosures about Market Risk			2331

Item 4. Controls and Procedures			2331

PART II. Other Information			2332

Item 1. Legal Proceedings			2432

Item 1A. Risk Factors			2432

Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities			2432

Item 3. Defaults Upon Senior Securities			2432

Item 4. Mine Safety Disclosures			2432

Item 5. Other Information			2432

Item 6. Exhibits			2533

Signature			2634

Table of Contents

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

L.B. FOSTER COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


		March 31, 2023		December 31, 2022			September 30, 2023		December 31, 2022
		(Unaudited)					(Unaudited)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	2,639	$	2,882	Cash and cash equivalents	$	2,969	$	2,882
Accounts receivable - net (Note 5)	Accounts receivable - net (Note 5)	54,904		82,455		Accounts receivable - net (Note 5)	64,638		82,455
Contract assets - net (Note 3)	Contract assets - net (Note 3)	31,207		33,613		Contract assets - net (Note 3)	30,503		33,613
Inventories - net (Note 6)	Inventories - net (Note 6)	84,594		75,721		Inventories - net (Note 6)	82,020		75,721

Other current assets	Other current assets	11,844		11,061		Other current assets	9,712		11,061

Total current assets	Total current assets	185,188		205,732		Total current assets	189,842		205,732
Property, plant, and equipment - net	Property, plant, and equipment - net	78,960		85,344		Property, plant, and equipment - net	75,867		85,344
Operating lease right-of-use assets - net	Operating lease right-of-use assets - net	16,513		17,291		Operating lease right-of-use assets - net	15,440		17,291
Other assets:	Other assets:					Other assets:
Goodwill (Note 4)	Goodwill (Note 4)	30,863		30,733		Goodwill (Note 4)	30,856		30,733
Other intangibles - net (Note 4)	Other intangibles - net (Note 4)	22,549		23,831		Other intangibles - net (Note 4)	20,006		23,831

Deferred tax assets (Note 9)	Deferred tax assets (Note 9)	—		24		Deferred tax assets (Note 9)	—		24
Other assets	Other assets	2,305		2,355		Other assets	2,580		2,355

TOTAL ASSETS	TOTAL ASSETS	$	336,378	$	365,310	TOTAL ASSETS	$	334,591	$	365,310
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	48,553	$	48,782	Accounts payable	$	44,900	$	48,782
Deferred revenue	Deferred revenue	14,556		19,452		Deferred revenue	16,003		19,452
Accrued payroll and employee benefits	Accrued payroll and employee benefits	4,176		10,558		Accrued payroll and employee benefits	12,358		10,558

Current portion of accrued settlement (Note 13)	Current portion of accrued settlement (Note 13)	8,000		8,000		Current portion of accrued settlement (Note 13)	8,000		8,000
Current maturities of long-term debt (Note 7)	Current maturities of long-term debt (Note 7)	117		127		Current maturities of long-term debt (Note 7)	97		127
Other accrued liabilities	Other accrued liabilities	13,100		16,192		Other accrued liabilities	14,679		16,192

Total current liabilities	Total current liabilities	88,502		103,111		Total current liabilities	96,037		103,111
Long-term debt (Note 7)	Long-term debt (Note 7)	79,979		91,752		Long-term debt (Note 7)	71,592		91,752
Deferred tax liabilities (Note 9)	Deferred tax liabilities (Note 9)	1,753		3,109		Deferred tax liabilities (Note 9)	1,131		3,109
Long-term portion of accrued settlement (Note 13)	Long-term portion of accrued settlement (Note 13)	8,000		8,000		Long-term portion of accrued settlement (Note 13)	4,000		8,000
Long-term operating lease liabilities	Long-term operating lease liabilities	13,416		14,163		Long-term operating lease liabilities	12,312		14,163
Other long-term liabilities	Other long-term liabilities	7,714		7,577		Other long-term liabilities	7,391		7,577

Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Common stock, par value $0.01, authorized 20,000,000 shares; shares issued at March 31, 2023 and December 31, 2022, 11,115,779; shares outstanding at March 31, 2023 and December 31, 2022, 10,809,711 and 10,776,827, respectively		111		111
Common stock, par value $0.01, authorized 20,000,000 shares; shares issued at September 30, 2023 and December 31, 2022, 11,115,779; shares outstanding at September 30, 2023 and December 31, 2022, 10,804,800 and 10,776,827, respectively						Common stock, par value $0.01, authorized 20,000,000 shares; shares issued at September 30, 2023 and December 31, 2022, 11,115,779; shares outstanding at September 30, 2023 and December 31, 2022, 10,804,800 and 10,776,827, respectively	111		111
Paid-in capital	Paid-in capital	40,951		41,303		Paid-in capital	41,832		41,303
Retained earnings	Retained earnings	121,017		123,169		Retained earnings	125,063		123,169
Treasury stock - at cost, 306,068 and 338,952 common stock shares at March 31, 2023 and December 31, 2022, respectively		(5,174)		(6,240)
Treasury stock - at cost, 310,979 and 338,952 common stock shares at September 30, 2023 and December 31, 2022, respectively						Treasury stock - at cost, 310,979 and 338,952 common stock shares at September 30, 2023 and December 31, 2022, respectively	(5,062)		(6,240)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(20,296)		(21,165)		Accumulated other comprehensive loss	(20,123)		(21,165)
Total L.B. Foster Company stockholders’ equity	Total L.B. Foster Company stockholders’ equity	136,609		137,178		Total L.B. Foster Company stockholders’ equity	141,821		137,178
Noncontrolling interest	Noncontrolling interest	405		420		Noncontrolling interest	307		420
Total stockholders’ equity	Total stockholders’ equity	137,014		137,598		Total stockholders’ equity	142,128		137,598
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	336,378	$	365,310	TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	334,591	$	365,310

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

L.B. FOSTER COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
			2023		2022				2023		2022		2023		2022

Sales of goods	Sales of goods		$	98,538	$	84,421		Sales of goods	$	131,065	$	117,302	$	361,770	$	318,307
Sales of services	Sales of services		16,950		14,373			Sales of services	14,280		12,713		47,097		42,017
Total net sales	Total net sales		115,488		98,794			Total net sales	145,345		130,015		408,867		360,324
Cost of goods sold	Cost of goods sold		78,065		69,845			Cost of goods sold	103,061		93,737		282,195		258,913
Cost of services sold	Cost of services sold		14,132		12,502			Cost of services sold	14,060		13,181		42,905		38,574
Total cost of sales	Total cost of sales		92,197		82,347			Total cost of sales	117,121		106,918		325,100		297,487
Gross profit	Gross profit		23,291		16,447			Gross profit	28,224		23,097		83,767		62,837
Selling and administrative expenses	Selling and administrative expenses		21,423		17,298			Selling and administrative expenses	24,160		22,618		70,111		59,310
Amortization expense	Amortization expense		1,365		1,436			Amortization expense	1,379		1,599		4,119		4,454
Operating profit (loss)	Operating profit (loss)		503		(2,287)			Operating profit (loss)	2,685		(1,120)		9,537		(927)

Interest expense - net	Interest expense - net		1,388		370			Interest expense - net	1,442		993		4,404		1,747

Other expense (income) - net	Other expense (income) - net		1,827		(563)			Other expense (income) - net	917		168		3,463		(1,096)

Loss before income taxes			(2,712)		(2,094)
Income tax benefit			(541)		(508)
Net loss			(2,171)		(1,586)
Income (loss) before income taxes								Income (loss) before income taxes	326		(2,281)		1,670		(1,578)
Income tax (benefit) expense								Income tax (benefit) expense	(121)		(176)		(99)		137
Net income (loss)								Net income (loss)	447		(2,105)		1,769		(1,715)
Net loss attributable to noncontrolling interest	Net loss attributable to noncontrolling interest		(19)		(20)			Net loss attributable to noncontrolling interest	(68)		(28)		(125)		(82)

Net loss attributable to L.B. Foster Company			$	(2,152)	$	(1,566)
Net income (loss) attributable to L.B. Foster Company								Net income (loss) attributable to L.B. Foster Company	$	515	$	(2,077)	$	1,894	$	(1,633)

Basic loss per common share			$	(0.20)	$	(0.15)
Basic earnings (loss) per common share								Basic earnings (loss) per common share	$	0.05	$	(0.20)	$	0.18	$	(0.16)

Diluted loss per common share			$	(0.20)	$	(0.15)
Diluted earnings (loss) per common share								Diluted earnings (loss) per common share	$	0.05	$	(0.20)	$	0.17	$	(0.16)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

L.B. FOSTER COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~LOSS~~(LOSS) INCOME

(Unaudited)

(In thousands)
Three Months Ended
March 31,
2023 2022
Net loss $ (2,171) $ (1,586)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment 1,247 (880)
Unrealized (loss) gain on cash flow hedges, net of tax benefit of $0 and $188, respectively (418) 551
Cash flow hedges reclassified to earnings, net of tax expense of $0 and $66, respectively — 93
Reclassification of pension liability adjustments to earnings, net of tax expense of $2 and $16, respectively* 40 49
Total comprehensive loss (1,302) (1,773)
Less comprehensive (loss) income attributable to noncontrolling interest:
Net loss attributable to noncontrolling interest (19) (20)
Foreign currency translation adjustment 4 85
Amounts attributable to noncontrolling interest (15) 65
Comprehensive loss attributable to L.B. Foster Company $ (1,287) $ (1,838)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022


Net income (loss)	$	447	$	(2,105)	$	1,769	$	(1,715)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment	(1,651)		(4,341)		852		(8,933)
Unrealized gain on cash flow hedges, net of tax expense of $0, $217, $0, and $455, respectively	1		632		79		1,330
Cash flow hedges reclassified to earnings, net of tax expense of $0, $0, $0, and $66, respectively	—		—		—		93
Reclassification of pension liability adjustments to earnings, net of tax expense of $1, $8, $5, and $40, respectively*	42		50		123		149
Total comprehensive (loss) income	(1,161)		(5,764)		2,823		(9,076)
Less comprehensive (loss) income attributable to noncontrolling interest:
Net loss attributable to noncontrolling interest	(68)		(28)		(125)		(82)
Foreign currency translation adjustment	(21)		(21)		12		3
Amounts attributable to noncontrolling interest	(89)		(49)		(113)		(79)
Comprehensive (loss) income attributable to L.B. Foster Company	$	(1,072)	$	(5,715)	$	2,936	$	(8,997)


*			Reclassifications out of “Accumulated other comprehensive loss” for pension obligations are charged to “Selling and administrative expenses” within the Condensed Consolidated Statements of Operations.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

L.B. FOSTER COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)
Three Months Ended
March 31,
2023 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,171) $ (1,586)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Deferred income taxes (1,233) (574)
Depreciation 2,505 1,938
Amortization 1,365 1,436
Equity in income of nonconsolidated investments (17) (87)
(Gain) loss on sales and disposals of property, plant, and equipment (14) 23
Stock-based compensation 884 258
Loss on asset divestitures 2,033 —
Change in operating assets and liabilities:
Accounts receivable 26,239 (4,556)
Contract assets (860) 1,116
Inventories (15,564) (4,781)
Other current assets (791) (4,648)
Other noncurrent assets (1,439) 818
Accounts payable 4,921 4,680
Deferred revenue (707) 5,907
Accrued payroll and employee benefits (6,386) (4,181)
Other current liabilities (2,981) (2,377)
Other long-term liabilities 1,148 (1,022)
Net cash provided by (used in) operating activities 6,932 (7,636)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of property, plant, and equipment 16 30
Capital expenditures on property, plant, and equipment (699) (1,764)
Proceeds from business dispositions 5,344 1,195
Net cash provided by (used in) investing activities 4,661 (539)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of debt (55,133) (30,892)
Proceeds from debt 43,086 35,301
Treasury stock acquisitions (309) (397)
Investment of noncontrolling interest 334 —
Net cash (used in) provided by financing activities (12,022) 4,012
Effect of exchange rate changes on cash and cash equivalents 186 30
Net decrease in cash and cash equivalents (243) (4,133)
Cash and cash equivalents at beginning of period 2,882 10,372
Cash and cash equivalents at end of period $ 2,639 $ 6,239
Supplemental disclosure of cash flow information:
Interest paid $ 1,425 $ 369
Income taxes received $ (1,564) $ (44)


	Nine Months Ended September 30,
	2023		2022


CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	1,769	$	(1,715)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Deferred income taxes	(1,958)		(962)
Depreciation	7,449		6,083
Amortization	4,119		4,454

Equity in loss (income) of nonconsolidated investments	6		(38)
Gain on sales and disposals of property, plant, and equipment	(366)		(214)
Stock-based compensation	2,757		1,570
Loss (gain) on asset divestitures	3,074		(44)

Change in operating assets and liabilities:
Accounts receivable	15,927		(23,760)
Contract assets	(261)		(1,037)
Inventories	(16,047)		(21,571)
Other current assets	1,108		2,309

Other noncurrent assets	(762)		2,468

Accounts payable	1,201		12,307
Deferred revenue	782		7,493
Accrued payroll and employee benefits	1,809		(417)
Accrued settlement	(4,000)		(4,000)
Other current liabilities	(1,044)		54
Other long-term liabilities	(253)		(1,816)
Net cash provided by (used in) operating activities	15,310		(18,836)

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of property, plant, and equipment	539		259
Capital expenditures on property, plant, and equipment	(2,784)		(4,559)
Proceeds from business dispositions	7,706		8,800
Acquisitions, net of cash acquired	337		(58,561)
Net cash provided by (used in) investing activities	5,798		(54,061)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of debt	(150,115)		(128,771)
Proceeds from debt	129,853		197,926


Debt issuance costs	—		(182)
Treasury stock acquisitions	(1,193)		(405)

Investment of noncontrolling interest	334		—
Net cash (used in) provided by financing activities	(21,121)		68,568

Effect of exchange rate changes on cash and cash equivalents	100		(1,100)
Net increase (decrease) in cash and cash equivalents	87		(5,429)
Cash and cash equivalents at beginning of period	2,882		10,372
Cash and cash equivalents at end of period	$	2,969	$	4,943
Supplemental disclosure of cash flow information:
Interest paid	$	4,351	$	1,337
Income taxes received	$	(271)	$	(5,151)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

L.B. FOSTER COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands)

Three Months Ended March 31, 2023
Common
Stock Paid-in
Capital Retained
Earnings Treasury
Stock Accumulated Other
Comprehensive Loss Noncontrolling
Interest Total Stockholders’
Equity
Balance, December 31, 2022 $ 111 $ 41,303 $ 123,169 $ (6,240) $ (21,165) $ 420 $ 137,598
Net loss — — (2,152) — — (19) (2,171)
Other comprehensive income, net of tax:
Pension liability adjustment — — — — 40 — 40
Foreign currency translation adjustment — — — — 1,247 4 1,251
Unrealized derivative loss on cash flow hedges — — — — (418) — (418)
Issuance of 32,884 common shares, net of shares withheld for taxes — (1,236) — 1,066 — — (170)
Stock-based compensation — 884 — — — — 884
Balance, March 31, 2023 $ 111 $ 40,951 $ 121,017 $ (5,174) $ (20,296) $ 405 $ 137,014


	Three Months Ended September 30, 2023
	Common Stock		Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total Stockholders’ Equity
Balance, June 30, 2023	$	111	$	40,919	$	124,548	$	(4,846)	$	(18,536)	$	396	$	142,592

Net income (loss)	—		—		515		—		—		(68)		447
Other comprehensive income, net of tax:
Pension liability adjustment	—		—		—		—		42		—		42
Foreign currency translation adjustment	—		—		—		—		(1,630)		(21)		(1,651)
Unrealized derivative gain on cash flow hedges	—		—		—		—		1		—		1

Purchase of 12,102 common shares for treasury	—		—		—		(216)		—		—		(216)
Issuance of 0 common shares, net of shares withheld for taxes	—		(15)		—		—		—		—		(15)
Stock-based compensation	—		928		—		—		—		—		928


Balance, September 30, 2023	$	111	$	41,832	$	125,063	$	(5,062)	$	(20,123)	$	307	$	142,128

Three Months Ended March 31, 2022
Common
Stock Paid-in
Capital Retained
Earnings Treasury
Stock Accumulated Other
Comprehensive Loss Noncontrolling
Interest Total Stockholders’
Equity
Balance, December 31, 2021 $ 111 $ 43,272 $ 168,733 $ (10,179) $ (18,845) $ 518 $ 183,610
Net loss — — (1,566) — — (20) (1,586)
Other comprehensive loss, net of tax:
Pension liability adjustment — — — — 49 — 49
Foreign currency translation adjustment — — — — (965) 85 (880)
Unrealized derivative gain on cash flow hedges — — — — 551 — 551
Cash flow hedges reclassified to earnings — — — — 93 — 93
Issuance of 34,440 common shares, net of shares withheld for taxes — (1,377) — 979 — — (398)
Stock-based compensation — 258 — — — — 258
Balance, March 31, 2022 $ 111 $ 42,153 $ 167,167 $ (9,200) $ (19,117) $ 583 $ 181,697


	Three Months Ended September 30, 2022
	Common Stock		Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total Stockholders’ Equity
Balance, June 30, 2022	$	111	$	42,201	$	169,177	$	(8,391)	$	(22,547)	$	488	$	181,039

Net income (loss)	—		—		(2,077)		—		—		(28)		(2,105)
Other comprehensive loss, net of tax:
Pension liability adjustment	—		—		—		—		50		—		50
Foreign currency translation adjustment	—		—		—		—		(4,341)		(21)		(4,362)
Unrealized derivative gain on cash flow hedges	—		—		—		—		632		—		632


Issuance of 605 common shares, net of shares withheld for taxes	—		20		—		40		—		—		60
Stock-based compensation	—		387		—		—		—		—		387


Balance, September 30, 2022	$	111	$	42,608	$	167,100	$	(8,351)	$	(26,206)	$	439	$	175,701

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

L.B. FOSTER COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands)


	Nine Months Ended September 30, 2023
	Common Stock		Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total Stockholders’ Equity
Balance, December 31, 2022	$	111	$	41,303	$	123,169	$	(6,240)	$	(21,165)	$	420	$	137,598

Net income (loss)	—		—		1,894		—		—		(125)		1,769
Other comprehensive income, net of tax:
Pension liability adjustment	—		—		—		—		123		—		123
Foreign currency translation adjustment	—		—		—		—		840		12		852
Unrealized derivative gain on cash flow hedges	—		—		—		—		79		—		79

Purchase of 63,343 common shares for treasury	—		—		—		(878)		—		—		(878)
Issuance of 91,316 common shares, net of shares withheld for taxes	—		(2,228)		—		2,056		—		—		(172)
Stock-based compensation	—		2,757		—		—		—		—		2,757


Balance, September 30, 2023	$	111	$	41,832	$	125,063	$	(5,062)	$	(20,123)	$	307	$	142,128

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	Nine Months Ended September 30, 2022
	Common Stock		Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total Stockholders’ Equity
Balance, December 31, 2021	$	111	$	43,272	$	168,733	$	(10,179)	$	(18,845)	$	518	$	183,610

Net income (loss)	—		—		(1,633)		—		—		(82)		(1,715)
Other comprehensive (loss) income, net of tax:
Pension liability adjustment	—		—		—		—		149		—		149
Foreign currency translation adjustment	—		—		—		—		(8,933)		3		(8,930)
Unrealized derivative gain on cash flow hedges	—		—		—		—		1,330		—		1,330
Cash flow hedges reclassified to earnings	—		—		—		—		93		—		93

Issuance of 61,212 common shares, net of shares withheld for taxes	—		(2,234)		—		1,828		—		—		(406)
Stock-based compensation	—		1,570		—		—		—		—		1,570


Balance, September 30, 2022	$	111	$	42,608	$	167,100	$	(8,351)	$	(26,206)	$	439	$	175,701

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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L.B. FOSTER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands, except share data)

Note 1. Financial Statements

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all estimates and adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended ~~March 31,~~September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. This Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and footnotes thereto included in L.B. Foster Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In this Quarterly Report on Form 10-Q, references to “we,” “us,” “our,” and the “Company” refer collectively to L.B. Foster Company and its consolidated subsidiaries.

Note 2. Business Segments

The Company is a global technology solutions provider of engineered, manufactured products and services that builds and supports infrastructure. The Company’s innovative engineering and product development solutions address the safety, reliability, and performance needs of its customers’ most challenging requirements. The Company maintains locations in North America, South America, Europe, and Asia. The Company’s segments represent components of the Company (a) that engage in activities from which revenue is generated and expenses are incurred, (b) whose operating results are regularly reviewed by the Chief Operating Decision Maker, who uses such information to make decisions about resources to be allocated to the segments, and (c) for which discrete financial information is available. Operating segments are evaluated on their segment profit contribution to the Company’s consolidated results. Other income and expenses, interest, income taxes, and certain other items are managed on a consolidated basis. The Company’s segment accounting policies are described in Note 2 Business Segments of the Notes to the Company’s Consolidated Financial Statements contained in its Annual Report on Form 10-K for the year ended December 31, 2022.

The operating results of the ~~Company's~~Company’s reportable segments were as follows for the periods presented:


		Three Months Ended March 31, 2023				Three Months Ended March 31, 2022					Three Months Ended September 30, 2023				Three Months Ended September 30, 2022
		Net Sales		Segment Operating Profit (Loss)		Net Sales		Segment Operating Profit (Loss)			Net Sales		Segment Operating Profit (Loss)		Net Sales		Segment Operating Profit
Rail, Technologies, and Services	Rail, Technologies, and Services	$	64,384	$	2,388	$	63,710	$	1,039	Rail, Technologies, and Services	$	86,866	$	3,865	$	77,350	$	539
Precast Concrete Products	Precast Concrete Products	24,288		(348)		15,010		(791)		Precast Concrete Products	38,642		3,389		28,856		1,245
Steel Products and Measurement	Steel Products and Measurement	26,816		(8)		20,074		(2,148)		Steel Products and Measurement	19,837		(1,521)		23,809		303
Total	Total	$	115,488	$	2,032	$	98,794	$	(1,900)	Total	$	145,345	$	5,733	$	130,015	$	2,087


	Nine Months Ended September 30, 2023				Nine Months Ended September 30, 2022
	Net Sales		Segment Operating Profit (Loss)		Net Sales		Segment Operating Profit (Loss)
Rail, Technologies, and Services	$	242,866	$	12,880	$	222,857	$	5,576
Precast Concrete Products	96,795		4,337		67,477		329
Steel Products and Measurement	69,206		(73)		69,990		(1,083)
Total	$	408,867	$	17,144	$	360,324	$	4,822

Segment profit (loss) from operations, as shown above, includes allocated corporate operating expenses. Operating expenses related to corporate headquarter functions that directly support the segment activity are allocated based on segment headcount, revenue contribution, or activity of the business units within the segments, based on the corporate activity type provided to the segment. The expense allocation excludes certain corporate costs that are separately managed from the segments.

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The following table demonstrates a reconciliation of reportable segment net profit ~~(loss)~~ to the Company’s consolidated total for the periods presented:


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022				2023		2022		2023		2022
Operating profit (loss) for reportable segments		$	2,032	$	(1,900)
Operating profit for reportable segments							Operating profit for reportable segments	$	5,733	$	2,087	$	17,144	$	4,822
Interest expense - net	Interest expense - net	(1,388)		(370)			Interest expense - net	(1,442)		(993)		(4,404)		(1,747)

Other (expense) income - net	Other (expense) income - net	(1,827)		563			Other (expense) income - net	(917)		(168)		(3,463)		1,096

Unallocated corporate expenses and other unallocated charges	Unallocated corporate expenses and other unallocated charges	(1,529)		(387)			Unallocated corporate expenses and other unallocated charges	(3,048)		(3,207)		(7,607)		(5,749)
Loss before income taxes		$	(2,712)	$	(2,094)
Income (loss) before income taxes							Income (loss) before income taxes	$	326	$	(2,281)	$	1,670	$	(1,578)

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The following table illustrates assets of the Company by reportable segment for the periods presented:


		March 31, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Rail, Technologies, and Services	Rail, Technologies, and Services	$	163,001	$	172,111	Rail, Technologies, and Services	$	164,728	$	172,111
Precast Concrete Products	Precast Concrete Products	104,581		108,598		Precast Concrete Products	106,243		108,598
Steel Products and Measurement	Steel Products and Measurement	38,236		54,516		Steel Products and Measurement	36,481		54,516
Unallocated corporate assets	Unallocated corporate assets	30,560		30,085		Unallocated corporate assets	27,139		30,085
Total	Total	$	336,378	$	365,310	Total	$	334,591	$	365,310

On August 30, 2023, the Company announced the discontinuation of its Bridge Products grid deck product line. The Bedford, PA based operations supporting the product line are expected to cease in the fourth quarter of 2023. For the three months ended September 30, 2023 and 2022, the product line had $283 and $2,967 in sales, respectively, and for the nine months ended September 30, 2023 and 2022, the product line had $3,749 and $12,975 in sales, respectively. The Company incurred $1,069 of exit costs recorded in “Other expense (income) - net,” which includes $345 in inventory write-downs, $462 in personnel expenses, and $262 in other exit costs. The Company expects to incur an additional $520 of personnel expenses associated with the exit through 2024. During the three months ended September 30, 2023 the Company also recorded a $1,977 reduction in net sales and a $3,051 reduction in gross profit stemming from changes in expected value of certain commercial projects associated with the exit of the product line. The grid deck product line was reported in the Bridge Products business unit within the Steel Products and Measurement segment.

On June 30, 2023, the Company sold substantially all the operating assets of the prestressed concrete railroad tie business operated by its wholly-owned subsidiary, CXT Incorporated (“Ties”), located in Spokane, WA, for $2,362 in proceeds, subject to final working capital adjustments, generating a $1,009 loss on the sale, which was recorded in “Other expense (income) - net.” The Ties business was reported in the Rail Products business unit within the Rail, Technologies, and Services segment.

On March 30, 2023, the Company sold substantially all the operating assets of its Precision Measurement Products and Systems business, Chemtec Energy Services LLC ~~business~~ (“Chemtec”), for $5,344 in proceeds, subject to final working capital adjustments, generating a ~~$2,033~~$2,065 loss on the sale, which was recorded in “Other expense (income) - net.” The Chemtec business was reported in the Coatings and Measurement business unit within the Steel Products and Measurement segment.

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Note 3. Revenue

The following table summarizes the Company’s net sales by major product and service category for the periods presented:


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022				2023		2022		2023		2022
Rail Products and Global Friction Management	Rail Products and Global Friction Management	$	56,048	$	51,651		Rail Products and Global Friction Management	$	76,262	$	69,573	$	214,236	$	192,527
Technology Services and Solutions	Technology Services and Solutions	8,336		12,059			Technology Services and Solutions	10,604		7,777		28,630		30,330
Rail, Technologies, and Services	Rail, Technologies, and Services	64,384		63,710			Rail, Technologies, and Services	86,866		77,350		242,866		222,857
Precast Concrete Buildings	Precast Concrete Buildings	10,886		9,970			Precast Concrete Buildings	20,127		15,525		50,338		41,306
Other Precast Concrete Products		13,402		5,040
Precast Infrastructure Products							Precast Infrastructure Products	18,515		13,331		46,457		26,171
Precast Concrete Products	Precast Concrete Products	24,288		15,010			Precast Concrete Products	38,642		28,856		96,795		67,477
Fabricated Steel Products	Fabricated Steel Products	10,517		12,604			Fabricated Steel Products	14,218		15,300		39,589		45,871
Coatings and Measurement	Coatings and Measurement	16,299		7,470			Coatings and Measurement	5,619		8,509		29,617		24,119
Steel Products and Measurement	Steel Products and Measurement	26,816		20,074			Steel Products and Measurement	19,837		23,809		69,206		69,990
Total net sales	Total net sales	$	115,488	$	98,794		Total net sales	$	145,345	$	130,015	$	408,867	$	360,324

The majority of the Company’s revenue is from products transferred and services rendered to customers at a point in time. The Company recognizes revenue at the point in time at which the customer obtains control of the product or service, which is generally when the product title passes to the customer upon shipment or the service has been rendered to the customer. In limited cases, title does not transfer and revenue is not recognized until the customer has received the products at a designated physical location.

Net sales by the timing of the transfer of goods and services was as follows for the periods presented:


		Three Months Ended March 31, 2023									Three Months Ended September 30, 2023
		Rail, Technologies, and Services		Precast Concrete Products		Steel Products and Measurement		Total			Rail, Technologies, and Services		Precast Concrete Products		Steel Products and Measurement		Total
Point in time	Point in time	$	53,834	$	13,402	$	15,726	$	82,962	Point in time	$	72,246	$	18,516	$	20,018	$	110,780
Over time	Over time	10,550		10,886		11,090		32,526		Over time	14,620		20,126		(181)		34,565
Total net sales	Total net sales	$	64,384	$	24,288	$	26,816	$	115,488	Total net sales	$	86,866	$	38,642	$	19,837	$	145,345

		Three Months Ended March 31, 2022									Three Months Ended September 30, 2022
		Rail, Technologies, and Services		Precast Concrete Products		Steel Products and Measurement		Total			Rail, Technologies, and Services		Precast Concrete Products		Steel Products and Measurement		Total
Point in time	Point in time	$	49,166	$	4,263	$	15,062	$	68,491	Point in time	$	64,913	$	13,331	$	20,871	$	99,115
Over time	Over time	14,544		10,747		5,012		30,303		Over time	12,437		15,525		2,938		30,900
Total net sales	Total net sales	$	63,710	$	15,010	$	20,074	$	98,794	Total net sales	$	77,350	$	28,856	$	23,809	$	130,015


	Nine Months Ended September 30, 2023
	Rail, Technologies, and Services		Precast Concrete Products		Steel Products and Measurement		Total
Point in time	$	202,003	$	46,458	$	56,151	$	304,612
Over time	40,863		50,337		13,055		104,255
Total net sales	$	242,866	$	96,795	$	69,206	$	408,867

	Nine Months Ended September 30, 2022
	Rail, Technologies, and Services		Precast Concrete Products		Steel Products and Measurement		Total
Point in time	$	179,951	$	26,171	$	56,897	$	263,019
Over time	42,906		41,306		13,093		97,305
Total net sales	$	222,857	$	67,477	$	69,990	$	360,324

During the three and nine months ended September 30, 2023, the Company recorded a $1,977 reduction in net sales stemming from changes in expected value of certain commercial projects associated with the exit of the bridge grid deck product line.

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The Company’s performance obligations under long-term agreements with its customers are generally satisfied over time. Revenue under long-term agreements is ~~generally~~at times recognized using an input measure based upon the proportion of actual costs incurred to estimated total project costs or an input measure based upon actual labor costs as a percentage of estimated total labor costs, depending

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upon which measure the Company believes best depicts its performance to date under the terms of the contract. ~~A certain portion of the~~The Company’s revenue recognized over time under ~~these~~ long-term agreements is also at times recognized using an output method, specifically units delivered, based upon certain customer acceptance and delivery requirements. The use of an input or an output measure to recognize revenue is determined based on what is most appropriate given the nature of the work performed and terms of the associated agreement.

Revenue recognized over time was as follows for the periods presented:


		Three Months Ended March 31,				Percentage of Total Net Sales Three Months Ended March 31,					Three Months Ended September 30,				Percentage of Total Net Sales Three Months Ended September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Over time input method	Over time input method	$	16,211	$	19,322	14.0	%	19.6	%	Over time input method	$	12,642	$	14,380	8.7	%	11.1	%
Over time output method	Over time output method	16,315		10,981		14.1		11.1		Over time output method	21,923		16,520		15.1		12.7
Total over time sales	Total over time sales	$	32,526	$	30,303	28.2	%	30.7	%	Total over time sales	$	34,565	$	30,900	23.8	%	23.8	%


	Nine Months Ended September 30,				Percentage of Total Net Sales Nine Months Ended September 30,
	2023		2022		2023		2022
Over time input method	$	44,577	$	53,791	10.9	%	14.9	%
Over time output method	59,678		43,514		14.6		12.1
Total over time sales	$	104,255	$	97,305	25.5	%	27.0	%

The timing of revenue recognition, billings, and cash collections results in billed receivables, costs in excess of billings (included in “Contract ~~assets”~~assets - net”), and billings in excess of costs (contract liabilities), included in “Deferred revenue” within the Condensed Consolidated Balance Sheets.

The following table sets forth the ~~Company's~~Company’s contract assets:


	Contract Assets
Balance as of December 31, 2022	$	33,613
Net additions to contract assets	~~1,290~~3,718
Transfers from contract asset balance to accounts receivable	~~(3,696)~~(6,828)
Balance as of ~~March 31,~~September 30, 2023	$	~~31,207~~30,503

The following table sets forth the ~~Company's~~Company’s contract liabilities:


	Contract Liabilities
Balance as of December 31, 2022	$	6,781
Revenue recognized from contract liabilities	~~(3,443)~~(4,421)
Increase in billings in excess of cost, excluding revenue recognized	~~1,983~~3,635
Other adjustments, including business divestiture	~~(2,078)~~(1,904)
Balance as of ~~March 31,~~September 30, 2023	$	~~3,243~~4,091

The Company records provisions related to the allowance for credit losses associated with contract assets. Provisions are recorded based upon a specific review of individual contracts as necessary, and a standard provision over any remaining contract assets pooled together based on similar risk of credit loss. The development of these provisions is based on historical collection trends, accuracy of estimates within contract margin reporting, as well as the expectation that collection patterns and margin reporting will continue to adhere to patterns observed in recent years. These expectations are formed based on trends observed, as well as current and expected future conditions.

As of ~~March 31,~~September 30, 2023, the Company had approximately ~~$259,881~~$243,219 of obligations under new contracts and remaining performance obligations, which is also referred to as backlog. Approximately ~~8.9%~~10.9% of the ~~March 31,~~September 30, 2023 backlog was related to projects that are anticipated to extend beyond ~~March 31,~~September 30, 2024.

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Note 4. Goodwill and Other Intangible Assets

The following table presents the changes in goodwill balance by reportable segment for the period presented:


		Rail, Technologies, and Services		Precast Concrete Products		Steel Products and Measurement		Total			Rail, Technologies, and Services		Precast Concrete Products		Steel Products and Measurement		Total
Balance as of December 31, 2022	Balance as of December 31, 2022	$	19,948	$	10,785	$	—	$	30,733	Balance as of December 31, 2022	$	19,948	$	10,785	$	—	$	30,733

VanHooseCo acquisition										VanHooseCo acquisition	—		242		—		242
Foreign currency translation impact	Foreign currency translation impact	130		—		—		130		Foreign currency translation impact	(119)		—		—		(119)

Balance as of March 31, 2023		$	20,078	$	10,785	$	—	$	30,863
Balance as of September 30, 2023										Balance as of September 30, 2023	$	19,829	$	11,027	$	—	$	30,856

The Company performs goodwill impairment tests annually during the fourth quarter, and also performs interim goodwill impairment tests if it is determined that it is more likely than not that the fair value of a reporting unit is less than the carrying amount. Qualitative factors are assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount, which included the impacts of current economic conditions, including but not limited to labor markets, supply chains, and

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other inflationary costs. However, these factors can be unpredictable and are subject to change. No interim goodwill impairment test was required as a result of the evaluation of qualitative factors as of ~~March 31,~~September 30, 2023. However, future impairment charges could result if future projections diverge unfavorably from current ~~expectations in the Rail Technologies and Precast Concrete Products reporting units.~~expectations.

As of ~~March 31,~~September 30, 2023 and December 31, 2022, the components of the Company’s intangible assets were as follows:


	September 30, 2023
	Weighted Average Amortization Period In Years	Gross Carrying Value		Accumulated Amortization		Net Carrying Amount

Patents	10	$	330	$	(194)	$	136
Customer relationships	16	27,276		(16,200)		11,076
Trademarks and trade names	16	7,942		(4,424)		3,518
Technology	13	32,474		(27,461)		5,013
Favorable lease	6	327		(64)		263
		$	68,349	$	(48,343)	$	20,006

March 31, 2023
Weighted Average
Amortization
Period In Years Gross
Carrying
Value Accumulated
Amortization Net
Carrying
Amount
Non-compete agreements 1 $ 27 $ (23) $ 4
Patents 10 330 (187) 143
Customer relationships 16 27,413 (14,965) 12,448
Trademarks and trade names 16 7,957 (4,142) 3,815
Technology 14 32,253 (26,405) 5,848
Favorable lease 6 327 (36) 291
$ 68,307 $ (45,758) $ 22,549

During the nine months ended September 30, 2023, certain fully amortized intangible assets of $27 related to non-compete agreements were eliminated from gross intangible assets and accumulated amortization.


	December 31, 2022
	Weighted Average Amortization Period In Years	Gross Carrying Value		Accumulated Amortization		Net Carrying Amount
Non-compete agreements	1	$	27	$	(16)	$	11
Patents	10	330		(187)		143
Customer relationships	16	27,184		(14,129)		13,055
Trademarks and trade names	16	7,933		(3,989)		3,944
Technology	14	32,201		(25,827)		6,374
Favorable lease	6	327		(23)		304
		$	68,002	$	(44,171)	$	23,831

On June 21, 2022, the Company acquired the stock of Skratch Enterprises Ltd. (“Skratch”). On August 12, 2022, the Company acquired the operating assets of VanHooseCo Precast LLC (“VanHooseCo”). As of September 30, 2023, the purchase accounting for these transactions is final. Purchase accounting adjustments recognized during the nine months ended September 30, 2023 were immaterial.

Note 5. Accounts Receivable

Changes in reserves for uncollectible accounts, which are recorded as part of “Selling and administrative expenses” in the Condensed Consolidated Statements of Operations, were recorded as an expense of ~~$155~~$763 and ~~$61~~income of $40 for the three months ended ~~March 31,~~September 30, 2023 and 2022, respectively, and an expense of $1,174 and $171 for the nine months ended September 30, 2023 and 2022, respectively.

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The Company establishes the allowance for credit losses based on historical collection patterns and other subjective conditions as necessary, including current and expected market conditions. Trade receivables are pooled based on age, which groups receivables of similar credit risk together. Management maintains stringent credit review practices and works to maintain positive customer relationships to further mitigate credit risk.

The following table sets forth the Company’s allowance for credit losses:


	Allowance for Credit Losses
Balance as of December 31, 2022	$	813
Current period provision	~~155~~1,174
Write-off against allowance	~~(100)~~(244)

Balance as of ~~March 31,~~September 30, 2023	$	~~868~~1,743

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Note 6. Inventory

Inventory is valued at average cost or net realizable value, whichever is lower. The Company’s components of inventory as of ~~March 31,~~September 30, 2023 and December 31, 2022 are summarized in the following table:

March 31,
2023 December 31,
2022
Finished goods $ 47,754 $ 41,431
Work-in-process 8,844 9,693
Raw materials 27,996 24,597
Inventories - net $ 84,594 $ 75,721


	September 30, 2023		December 31, 2022
Finished goods	$	46,740	$	41,431
Work-in-process	8,673		9,693
Raw materials	26,607		24,597
Inventories - net	$	82,020	$	75,721

Note 7. Long-Term Debt and Related Matters

Long-term debt consisted of the following:


		March 31, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Revolving credit facility	Revolving credit facility	$	79,825	$	91,567	Revolving credit facility	$	71,476	$	91,567

Finance leases and financing agreements	Finance leases and financing agreements	271		312		Finance leases and financing agreements	213		312
Total	Total	80,096		91,879		Total	71,689		91,879
Less current maturities	Less current maturities	(117)		(127)		Less current maturities	(97)		(127)
Long-term portion	Long-term portion	$	79,979	$	91,752	Long-term portion	$	71,592	$	91,752

On August 13, 2021, the Company, its domestic subsidiaries, and certain of its Canadian and United Kingdom subsidiaries (collectively, the “Borrowers”), entered into the Fourth Amended and Restated Credit Agreement (the “Credit Agreement”) with PNC Bank, N.A., Citizens Bank, N.A., Wells Fargo Bank, National Association, Bank of America, N.A., and BMO Harris Bank, National Association. The Credit Agreement, as amended, modifies the prior revolving credit facility, as amended, on terms more favorable to the Company and extends the maturity from April 30, 2024 to August 13, 2026. The Credit Agreement provides for a five-year, revolving credit facility that permits aggregate borrowings of the Borrowers up to $130,000 ~~(a $15,000 increase over the previous commitment)~~ with a sublimit of the equivalent of $25,000 U.S. dollars that is available to the Canadian and United Kingdom borrowers in the aggregate. The Credit Agreement’s incremental loan feature permits the Company to increase the available commitments under the facility by up to an additional $50,000 subject to the Company’s receipt of increased commitments from existing or new lenders and the satisfaction of certain conditions.

Borrowings under the Credit Agreement, as amended, will bear interest at rates based upon either the base rate or SOFR rate plus applicable margins. The Credit Agreement includes two financial covenants: (a) Maximum Gross Leverage Ratio, defined as the Company’s consolidated Indebtedness (as defined in the Credit Agreement) divided by the Company’s consolidated EBITDA, which must not exceed (i) 3.25 to 1.00 for all testing periods other than during an Acquisition Period (as defined in the Credit Agreement), and (ii) 3.50 to 1.00 for all testing periods occurring during an Acquisition Period, and (b) Minimum Consolidated Fixed Charge Coverage Ratio, defined as the Company’s consolidated EBITDA divided by the Company’s Fixed Charges (as defined in the Credit Agreement), which must be more than 1.05 to 1.00.

On August 12, 2022, the Company entered into a second amendment to its Credit Agreement (“Second Amendment”) to obtain approval for the acquisition of VanHooseCo ~~acquisition (as defined below)~~Precast, LLC (“VanHooseCo”) and temporarily modify certain financial covenants to accommodate the transaction. The Second Amendment permitted the Company to acquire the operating assets of VanHooseCo and modified the Maximum Gross Leverage Ratio covenant ~~to 3.75~~ through June 30, 2023 to accommodate the transaction.

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As of ~~March 31,~~September 30, 2023, the Company was in compliance with the covenants in the Credit Agreement, as amended, and had outstanding letters of credit of approximately ~~$1,084.~~

$2,544.

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Note 8. Earnings Per Common Share

(Share amounts in thousands)

The following table sets forth the computation of basic and diluted ~~loss~~earnings (loss) per common share for the periods indicated:

Three Months Ended
March 31,
2023 2022
Numerator for basic and diluted loss per common share:
Net loss $ (2,171) $ (1,586)
Denominator:
Weighted average shares outstanding 10,792 10,685
Denominator for basic loss per common share 10,792 10,685
Denominator for diluted loss per common share - adjusted weighted average shares outstanding 10,792 10,685
Basic loss per common share $ (0.20) $ (0.15)
Diluted loss per common share $ (0.20) $ (0.15)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator for basic and diluted earnings per common share:
Net income (loss) attributable to L.B. Foster Company	$	515	$	(2,077)	$	1,894	$	(1,633)


Denominator:
Weighted average shares outstanding	10,813		10,731		10,804		10,710
Denominator for basic earnings (loss) per common share	10,813		10,731		10,804		10,710
Effect of dilutive securities:
Stock compensation plans	160		—		91		—
Dilutive potential common shares	160		—		91		—
Denominator for diluted earnings (loss) per common share - adjusted weighted average shares outstanding	10,973		10,731		10,895		10,710


Basic earnings (loss) per common share	$	0.05	$	(0.20)	$	0.18	$	(0.16)


Diluted earnings (loss) per common share	$	0.05	$	(0.20)	$	0.17	$	(0.16)

There were ~~101~~109 and ~~122~~108 anti-dilutive shares for the three and nine months ended ~~March 31, 2023 and~~September 30, 2022, respectively, excluded from the calculation.

Note 9. Income Taxes

For the three months ended ~~March 31,~~September 30, 2023 and 2022, the Company recorded an income tax benefit of ~~$541~~$121 and ~~$508,~~$176, respectively, on pre-tax income of $326 and pre-tax losses of ~~$2,712 and $2,094,~~$2,281, respectively, for an effective income tax rate of ~~19.9%~~(37.1%) and ~~24.3%~~7.7%, respectively. ~~Due to~~For the ~~full valuation allowance~~nine months ended September 30, 2023 and 2022, the Company recorded an income tax benefit of $99 and income tax expense of $137, respectively, on ~~domestic deferred~~pre-tax income of $1,670 and pre-tax losses of $1,578, respectively, for an effective income tax ~~assets, the~~rate of (5.9%) and (8.7%), respectively. The Company's effective income tax ~~provision~~rate for the three and nine months ended ~~March 31,~~September 30, 2023 ~~does not reflect any tax benefit for domestic pre-tax losses, and is~~differed from the federal statutory rate of 21% primarily ~~comprised of taxes on our Canadian~~due to changes in the valuation allowance established against U.S. and United Kingdom ~~operations. The Company continued to maintain a full valuation allowance against its U.S.~~ deferred tax ~~assets, which is likely to result in significant variability of the effective tax rate in the current year.~~assets. Changes in pre-tax income projections, combined with the seasonal nature of our businesses, could also impact the effective income tax rate each quarter.

Note 10. Stock-Based Compensation

The Company recorded stock-based compensation expense of ~~$884~~$928 and ~~$258~~$387 for the three months ended ~~March 31,~~September 30, 2023 and 2022, respectively, and $2,757 and $1,570 for the nine months ended September 30, 2023 and 2022, respectively, related to restricted stock awards and performance ~~unit awards.~~share units. As of ~~March 31,~~September 30, 2023, unrecognized compensation expense for awards that the Company expects to vest approximated ~~$7,388.~~$6,059. The Company will recognize this unrecognized compensation expense over the upcoming ~~2.9~~2.4 years through March 1, 2026.

Shares issued as a result of vested stock-based compensation awards generally will be issued from previously issued shares that have been reacquired by the Company and held as treasury stock or authorized and previously unissued common stock.

Restricted Stock, Performance Share Units, and Performance-Based Stock Awards

Under the 2022 Equity and Incentive Compensation Plan, as amended, successor to the 2006 Omnibus Plan, the Company grants eligible employees restricted stock and performance share units. The forfeitable restricted stock awards granted generally time-vest ratably over a three-year period, unless indicated otherwise by the underlying restricted stock award agreement. Awards of restricted stock are subject to a minimum one-year vesting period, including those granted to non-employee directors. Performance share units are offered annually under separate three-year long-term incentive programs. Performance share units are subject to forfeiture and will be converted into common stock of the Company based upon the Company’s performance relative to performance measures and conversion multiples, as defined in the underlying program. The Company has, on occasion, issued performance share units with longer performance periods as incentivization and retention tools. If the Company’s estimate of the number of performance share units

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expected to vest changes in a subsequent accounting period, cumulative compensation expense could increase or decrease. The change will be recognized in the current period for the vested shares and would change future expense over the remaining vesting period.

Since 2017, non-employee directors have been permitted to defer receipt of annual stock awards and equity elected to be received in lieu of quarterly cash compensation. If so elected, these deferred stock units will be issued as common stock six months after separation from their service on the Board of Directors. Since 2018, no non-employee directors have elected the option to receive deferred stock units of the Company’s common stock in lieu of director cash compensation.

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In February 2023, the Compensation Committee approved the 2023-2025 Long Term Incentive Plan which includes grants of performance share units and restricted stock. The following table summarizes the restricted stock, deferred stock units, and performance-based stock and share unit activity for the ~~three~~nine months ended ~~March 31,~~September 30, 2023:


		Restricted Stock	Deferred Stock Units	Performance-Based Stock and Share Units	Weighted Average Grant Date Fair Value			Restricted Stock	Deferred Stock Units	Performance-Based Stock and Share Units	Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2022	Outstanding as of December 31, 2022	174,173	46,268	108,478	$	17.77	Outstanding as of December 31, 2022	174,173	46,268	108,478	$	17.77
Granted	Granted	139,990	—	367,558	11.64		Granted	181,914	—	367,558	11.78
Vested	Vested	(57,329)	—	—	16.54		Vested	(88,367)	(33,864)	—	15.97
Adjustment for incentive awards expected to vest	Adjustment for incentive awards expected to vest	—	—	20,104	15.36		Adjustment for incentive awards expected to vest	—	—	20,104	15.36

Outstanding as of March 31, 2023		256,834	46,268	496,140	$	14.61
Cancelled and forfeited							Cancelled and forfeited	(2,750)	—	—	14.46
Outstanding as of September 30, 2023							Outstanding as of September 30, 2023	264,970	12,404	496,140	$	14.20

Note 11. Fair Value Measurements

The Company determines the fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy includes three levels of inputs that may be used to measure fair value as described below:

Level 1: Observable inputs that reflect unadjusted quoted market prices in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs that are not corroborated by market data.

The classification of a financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Fair Value Measurements at Reporting Date Fair Value Measurements at Reporting Date
March 31,
2023 Level 1 Level 2 Level 3 December 31,
2022 Level 1 Level 2 Level 3
Term deposits $ 17 $ 17 $ — $ — $ 17 $ 17 $ — $ —
Interest rate swaps 1,511 — 1,511 — 1,930 — 1,930 —
Total assets $ 1,528 $ 17 $ 1,511 $ — $ 1,947 $ 17 $ 1,930 $ —
Cash equivalents - Included in “Cash and cash equivalents” within the Condensed Consolidated Balance Sheets are investments in non-domestic term deposits. The carrying amounts approximate fair value because of the short maturity of the instruments.

SOFR-based interest rate swaps - To reduce the impact of interest rate changes on outstanding variable-rate debt, the Company amended and entered into forward-starting SOFR-based interest rate swaps with notional values totaling $20,000 and $20,000 effective August 12, 2022 and August 31, 2022, respectively. The fair value of the interest rate swaps are based on market-observable forward interest rates and represents the estimated amount that the Company would pay to terminate the agreements. As such, the swap agreements are classified as Level 2 within the fair value hierarchy. As of September 30, 2023 and December 31, 2022, the interest rate swaps were recorded in “Other current assets” when the interest rate swaps’ fair market value are in an asset position, and “Other accrued liabilities” when in a liability position within our Condensed Consolidated Balance Sheets.


	Fair Value Measurements at Reporting Date								Fair Value Measurements at Reporting Date
	September 30, 2023		Level 1		Level 2		Level 3		December 31, 2022		Level 1		Level 2		Level 3
Term deposits	$	—	$	—	$	—	$	—	$	17	$	17	$	—	$	—
Interest rate swaps	2,009		—		2,009		—		1,930		—		1,930		—
Total assets	$	2,009	$	—	$	2,009	$	—	$	1,947	$	17	$	1,930	$	—

The $20,000 interest rate swap agreements that became effective August 2022 are accounted for as cash flow hedges and the objective of the hedges is to offset the expected interest variability on payments associated with the interest rate on our debt. The gains and losses related to the interest rate swaps are reclassified from “Accumulated other comprehensive loss” in our Condensed Consolidated

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Balance Sheets and included in “Interest expense - net” in our Condensed Consolidated Statements of Operations as the interest expense from our debt is recognized.

For the three months ended ~~March 31,~~September 30, 2023, the Company recognized interest income of $329 from interest rate swaps. For the nine months ended September 30, 2023 and 2022, the Company recognized interest income ~~of $245~~ and interest expense of ~~$97,~~$869 and $78, respectively, from interest rate swaps.

Note 12. Retirement Plans

Retirement Plans

The Company has three retirement plans that cover its hourly and salaried employees in the United States: one defined benefit plan, which is frozen, and two defined contribution plans. Employees are eligible to participate in the appropriate plan based on employment classification. The Company’s contributions to the defined benefit and defined contribution plans are governed by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the Company’s policy and investment guidelines applicable to each respective plan. The Company’s policy is to contribute at least the minimum in accordance with the funding standards of ERISA.

The Company maintains one defined contribution plan for its employees in Canada. In the United Kingdom, the Company maintains two defined contribution plans and a defined benefit plan, which is frozen. These plans are discussed in further detail below.

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United States Defined Benefit Plan

Net periodic pension costs for the United States defined benefit pension plan for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 were as follows:


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
			2023		2022				2023		2022		2023		2022

Interest cost	Interest cost		$	71	$	49		Interest cost	$	71	$	49	$	214	$	146
Expected return on plan assets	Expected return on plan assets		(64)		(66)			Expected return on plan assets	(64)		(66)		(192)		(198)
Recognized net actuarial loss	Recognized net actuarial loss		16		18			Recognized net actuarial loss	16		18		47		53
Net periodic pension cost	Net periodic pension cost		$	23	$	1		Net periodic pension cost	$	23	$	1	$	69	$	1

The Company has made contributions to its United States defined benefit plan of $176 during the nine months ended September 30, 2023 and expects to make total contributions of approximately $400 ~~to its to its United States defined benefit pension plan~~ during 2023.

United Kingdom Defined Benefit Plan

Net periodic pension costs for the United Kingdom defined benefit pension plan for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 were as follows:


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
			2023		2022				2023		2022		2023		2022
Interest cost	Interest cost		$	55	$	45		Interest cost	$	56	$	42	$	168	$	126
Expected return on plan assets	Expected return on plan assets		(83)		(81)			Expected return on plan assets	(84)		(74)		(252)		(222)
Amortization of prior service costs and transition amount	Amortization of prior service costs and transition amount		6		6			Amortization of prior service costs and transition amount	6		6		18		18
Recognized net actuarial loss	Recognized net actuarial loss		3		42			Recognized net actuarial loss	3		38		9		114
Net periodic pension (income) cost	Net periodic pension (income) cost		$	(19)	$	12		Net periodic pension (income) cost	$	(19)	$	12	$	(57)	$	36

United Kingdom regulations require trustees to adopt a prudent approach to funding required contributions to defined benefit pension plans. For the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company contributed approximately ~~$84~~$260 to the plan. The Company anticipates total contributions of approximately ~~$340~~$347 to the United Kingdom pension plan during 2023.

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Defined Contribution Plans

The Company sponsors five defined contribution plans for hourly and salaried employees across its domestic and international facilities. The following table summarizes the expense associated with the contributions made to these plans for the periods presented:


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022				2023		2022		2023		2022
United States	United States	$	614	$	305		United States	$	728	$	441	$	2,135	$	1,136
Canada	Canada	62		61			Canada	36		83		131		143
United Kingdom	United Kingdom	261		135			United Kingdom	294		588		881		588
		$	937	$	501			$	1,058	$	1,112	$	3,147	$	1,867

Note 13. Commitments and Contingent Liabilities

Product Liability Claims

The Company is subject to product warranty claims that arise in the ordinary course of its business. For certain manufactured products, the Company maintains a product warranty accrual, which is adjusted on a monthly basis as a percentage of cost of sales. In addition, the product warranty accrual is adjusted periodically based on the identification or resolution of known individual product warranty claims.

Union Pacific Railroad (“UPRR”) Concrete Tie Matter

On March 13, 2019, the Company and its subsidiary, CXT Incorporated (“CXT”), entered into a Settlement Agreement (the “Settlement Agreement”) with UPRR to resolve the ~~pending~~then-pending litigation in the matter of Union Pacific Railroad Company v. L.B. Foster Company and CXT Incorporated, Case No. CI 15-564, in the District Court for Douglas County, Nebraska.

Under the Settlement Agreement, the Company and CXT will pay UPRR the aggregate amount of $50,000 without pre-judgment interest, which began with a $2,000 immediate payment, and with the remaining $48,000 paid in installments over a six-year period

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commencing on the effective date of the Settlement Agreement through December 2024 pursuant to a Promissory Note. Additionally, commencing in January 2019 and through December 2024, UPRR agreed to purchase and has been purchasing from the Company and its subsidiaries and affiliates, a cumulative total amount of $48,000 of products and services, targeting $8,000 of annual purchases per year beginning March 13, 2019, per letters of intent under the Settlement Agreement. During the third quarter of 2021, in connection with the Company’s divestiture of its Piling Products division, the targeted annual purchases per year have been reduced to $6,000 for 2021 through 2024. The Settlement Agreement also includes a mutual release of all claims and liability regarding or relating to all CXT pre-stressed concrete railroad ties with no admission of liability and dismissal of the litigation with prejudice.

The expected payments under the UPRR Settlement Agreement for the remainder of the year ending December 31, 2023 and thereafter are as follows:


Year Ending December 31,	Year Ending December 31,			Year Ending December 31,
Remainder of 2023	Remainder of 2023	$	8,000	Remainder of 2023	$	4,000
2024	2024	8,000		2024	8,000

Total	Total	$	16,000	Total	$	12,000

Environmental and Legal Proceedings

The Company is subject to national, state, foreign, provincial, and/or local laws and regulations relating to the protection of the environment. The Company’s efforts to comply with environmental regulations may have an adverse effect on its future earnings.

On June 5, 2017, a General Notice Letter was received from the United States Environmental Protection Agency (“EPA”) indicating that the Company may be a potentially responsible party (“PRP”) regarding the Portland Harbor Superfund Site cleanup along with numerous other companies. More than 140 other companies received such a notice. The Company and a predecessor owned and operated a facility near the harbor site for a period prior to 1982. The net present value and undiscounted costs of the selected remedy throughout the harbor site are estimated by the EPA to be approximately $1.1 billion and $1.7 billion, respectively, and the remedial work is expected to take as long as 13 years to complete. These costs may increase given that the remedy will not be initiated or completed for several years. The Company is reviewing the basis for its identification by the EPA and the nature of the historic operations of a Company predecessor near the site. Additionally, the Company executed a PRP agreement which provides for a private allocation process among almost 100 PRPs in a working group whose work is ongoing and involves a process that will ultimately conclude a proposed allocation of liability for cleanup of the site and various sub-areas. The Company does not have any individual risk sharing agreements in place with respect to the site, and was only associated with the site from 1976 to when it purchased the stock of a company whose assets it sold in 1982 and which was dissolved in 1994. On March 26, 2020, the EPA issued a Unilateral

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Administrative Order to two parties requiring them to perform remedial design work for that portion of the Harbor Superfund Site that includes the area closest to the facility; the Company was not a recipient of this Unilateral Administrative Order. The Company cannot predict the ultimate impact of these proceedings because of the large number of PRPs involved throughout the harbor site, the size and extent of the site, the degree of contamination of various wastes, varying environmental impacts throughout the harbor site, the scarcity of data related to the facility once operated by the Company and a predecessor, potential comparative liability between the allocation parties and regarding non-participants, and the speculative nature of the remediation costs. Based upon information currently available, management does not believe that the Company’s alleged PRP status regarding the Portland Harbor Superfund Site or other compliance with the present environmental protection laws will have a material adverse effect on the financial condition, results of operations, cash flows, competitive position, or capital expenditures of the Company. As more information develops and the allocation process is completed, and given the resolution of factors like those described above, an unfavorable resolution could have a material adverse effect. As of ~~March 31,~~September 30, 2023 and December 31, 2022, the Company maintained environmental reserves approximating ~~$2,448~~$2,426 and $2,472, respectively.

The Company is also subject to other legal proceedings and claims that arise in the ordinary course of its business. Legal actions are subject to inherent uncertainties, and future events could change management’s assessment of the probability or estimated amount of potential losses from pending or threatened legal actions. Based on available information, it is the opinion of management that the ultimate resolution of pending or threatened legal actions, both individually and in the aggregate, will not result in losses having a material adverse effect on the Company’s financial position or liquidity as of ~~March 31,~~September 30, 2023.

If management believes that, based on available information, it is at least reasonably possible that a material loss (or additional material loss in excess of any accrual) will be incurred in connection with any legal actions, the Company discloses an estimate of the possible loss or range of loss, either individually or in the aggregate, as appropriate, if such an estimate can be made, or discloses that an estimate cannot be made. Based on the Company’s assessment as of ~~March 31,~~September 30, 2023, no such disclosures were considered necessary.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Dollars in thousands, except share data)

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Many of the forward-looking statements ~~are located in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”). Forward-looking statements~~ provide ~~management’s~~management's current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Sentences containing words such as “believe,” “intend,” “plan,” “may,” “expect,” “should,” “could,” “anticipate,” “estimate,” “predict,” “project,” or their negatives, or other similar expressions of a future or forward-looking nature generally should be considered forward-looking statements. Forward-looking statements in this Quarterly Report on ~~Form~~form 10-Q are based on ~~management’s~~management's current expectations and assumptions about future events that involve inherent risks and uncertainties and may concern, among other things, the Company’s expectations relating to our strategy, goals, projections, and plans regarding our financial position, liquidity, capital resources, and results of operations and decisions regarding our strategic growth initiatives, market position, and product development. While the Company considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory, and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control. The Company cautions readers that various factors could cause the actual results of the Company to differ materially from those indicated by forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Among the factors that could cause the actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties related to: ~~the COVID-19 pandemic, and~~ any future global health crises, and the related social, regulatory, and economic impacts and the response thereto by the Company, our employees, our customers, and national, state, or local governments; ~~volatility in the prices of oil and natural gas and the related impact on the midstream energy markets, which could result in cost mitigation actions, including shutdowns or furlough periods;~~ a continuation or worsening of the adverse economic conditions in the markets we serve, including recession, ~~whether as a result of the current COVID-19 pandemic or otherwise, including its impact on labor markets, supply chains, and other inflationary costs, travel and demand for oil and gas,~~ the continued volatility in the prices for oil and gas, governmental travel restrictions, project delays, and budget shortfalls, or otherwise; volatility in the global capital markets, including interest rate fluctuations, which could adversely affect our ability to access the capital markets on terms that are favorable to us; restrictions on our ability to draw on our credit agreement, including as a result of any future inability to comply with restrictive covenants contained therein; a ~~continuing~~ decrease in freight or transit rail ~~traffic, including as a result of the ongoing COVID-19 pandemic, strikes, or labor stoppages;~~traffic; environmental matters, including any costs associated with any remediation and monitoring of such matters; the risk of doing business in international markets, including compliance with anti-corruption and bribery laws, foreign currency fluctuations and inflation, and trade restrictions or embargoes; our ability to effectuate our strategy, including cost reduction initiatives, and our ability to effectively integrate acquired businesses or to divest businesses, such as the recent dispositions of the ~~Piling,~~ Track Components, Chemtec, and ~~Chemtec~~Ties businesses, and acquisitions of the Skratch Enterprises Ltd., Intelligent Video Ltd., and VanHooseCo Precast LLC businesses and to realize anticipated benefits; costs of and impacts associated with shareholder activism; ~~continued customer restrictions regarding the on-site presence of third party providers due to the COVID-19 pandemic;~~ the timeliness and availability of materials from our major suppliers, ~~including any continuation or worsening of the disruptions in the supply chain experienced as a result of the COVID-19 pandemic,~~ as well as the impact on our access to supplies of customer preferences as to the origin of such supplies, such as customers’ concerns about conflict minerals; labor disputes; ~~cyber-security~~cybersecurity risks such as data security breaches, malware, ransomware, “hacking,” and identity theft, which could disrupt our business and may result in misuse or misappropriation of confidential or proprietary information, and could result in the disruption or damage to our systems, increased costs and losses, or an adverse effect to our reputation; the continuing effectiveness of our ongoing implementation of an enterprise resource planning system; changes in current accounting estimates and their ultimate outcomes; the adequacy of internal and external sources of funds to meet financing needs, including our ability to negotiate any additional necessary amendments to our credit agreement or the terms of any new credit agreement, and reforms regarding the use of SOFR as a benchmark for establishing applicable interest rates; the Company’s ability to manage its working capital requirements and indebtedness; domestic and international taxes, including estimates that may impact taxes; domestic and foreign government regulations, including tariffs; economic conditions and regulatory changes caused by the United Kingdom’s exit from the European Union; geopolitical conditions, including the conflict in ~~Ukraine;~~Ukraine and Israel; a lack of state or federal funding for new infrastructure projects; an increase in manufacturing or material costs; the loss of future revenues from current customers; and risks inherent in litigation and the outcome of litigation and product warranty claims. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, actual outcomes could vary materially from those indicated. Significant risks and uncertainties that may affect the operations, performance, and results of the Company’s business and forward-looking statements include, but are not limited to, those set forth under Item 1A, “Risk Factors,” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2022, or as updated and/or amended by our other current or periodic filings with the Securities and Exchange Commission.

The forward-looking statements in this report are made as of the date of this report and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by the federal securities laws.

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General Overview and Business Update

Results of the Quarter

Three Months Ended
March 31, Percent
Change Percent of Total Net Sales
Three Months Ended
March 31,
2023 2022 2023 vs. 2022 2023 2022
Net sales $ 115,488 $ 98,794 16.9 % 100.0 % 100.0 %
Gross profit 23,291 16,447 41.6 20.2 16.6
Expenses:
Selling and administrative expenses 21,423 17,298 23.8 18.5 17.5
Amortization expense 1,365 1,436 (4.9) 1.2 1.5
Operating profit (loss) 503 (2,287) 122.0 0.4 (2.3)
Interest expense - net 1,388 370 ** 1.2 0.4
Other expense (income) - net 1,827 (563) ** 1.6 (0.6)
Loss before income taxes (2,712) (2,094) (29.5) (2.3) (2.1)
Income tax benefit (541) (508) (6.5) (0.5) (0.5)
Net loss (2,171) (1,586) (36.9) (1.9) (1.6)
Net loss attributable to noncontrolling interest (19) (20) 5.0 (0.0) (0.0)
Net loss attributable to L.B. Foster Company $ (2,152) $ (1,566) (37.4 %) (1.9 %) (1.6 %)
Diluted loss per common share $ (0.20) $ (0.15)

** Results of the calculation are not considered meaningful for presentation purposes.


	Three Months Ended September 30,						Change
	2023			2022			2023 vs. 2022
Net sales	$	145,345		$	130,015		$	15,330
Gross profit	28,224			23,097			5,127
Gross profit margin	19.4		%	17.8		%	160 bps
Expenses:
Selling and administrative expenses	$	24,160		$	22,618		$	1,542
Selling and administrative expenses as a percent of sales	16.6		%	17.4		%	(80) bps
Amortization expense	1,379			1,599			(220)
Operating profit (loss)	$	2,685		$	(1,120)		$	3,805

Operating profit (loss) margin	1.8		%	(0.9)		%	270 bps
Interest expense - net	$	1,442		$	993		$	449


Other expense - net	917			168			749

Income (loss) before income taxes	$	326		$	(2,281)		$	2,607
Income tax benefit	(121)			(176)			55
Net income (loss)	$	447		$	(2,105)		$	2,552
Net loss attributable to noncontrolling interest	(68)			(28)			(40)
Net income (loss) attributable to L.B. Foster Company	$	515		$	(2,077)		$	2,592
Diluted earnings (loss) per common share	$	0.05		$	(0.20)		$	0.25

L.B. Foster Company is a global technology solutions provider of engineered, manufactured products and services that builds and supports infrastructure. The Company’s innovative engineering and product development solutions address the safety, reliability, and performance needs of its customers’ most challenging requirements. The Company maintains locations in North America, South America, Europe, and Asia. The Company is organized and operates in three reporting segments: Rail, Technologies, and Services, Precast Concrete Products, and Steel Products and Measurement.

On August 30, 2023, the Company announced the discontinuation of its Bridge Products grid deck product line which was reported in the Fabricated Steel Products business unit within the Steel Products and Measurement segment. The Bedford, PA based operations supporting the product line are expected to cease in the fourth quarter of 2023. For the three months ended September 30, 2023 and 2022, the product line had $283 and $2,967 in sales, respectively, and for the nine months ended September 30, 2023 and 2022, the product line had $3,749 and $12,975 in sales, respectively. The decision to exit the bridge grid deck product line is a result of a weak bridge grid deck market condition and outlook due to customer adoption of newer technologies replacing the grid deck solution. During the three months ended September 30, 2023, the Company incurred $1,069 of exit costs recorded in “Other expense (income) - net,” which included $345 in inventory write-downs, $462 in personnel expenses, and $262 in other exit costs. The Company expects to incur an additional $520 of personnel expenses associated with the exit through 2024. During the three months ended September 30, 2023 the Company also recorded a $1,977 reduction in net sales and a $3,051 reduction in gross profit stemming from changes in expected value of certain commercial projects associated with the exit of the bridge grid deck product line.

Acquisition and Divestiture Summary

On August 12, 2022, the Company acquired the operating assets of VanHooseCo Precast, LLC (“VanHooseCo”), a business specializing in precast concrete walls, water management products, and forms for the commercial and residential infrastructure markets for $52,146 net of cash acquired. VanHooseCo has been included in the Company’s Precast Concrete Products segment.

On June 21, 2022, the Company acquired the stock of Skratch Enterprises Ltd. (“Skratch”) for $7,402, which is inclusive of deferred payments withheld by the Company of $1,228, to be paid over the ~~next four~~five years following the transaction or utilized to satisfy post-closing working capital adjustments or indemnity claims under the purchase agreement. Skratch is an industry leader in digital system integration with expertise in advanced digital display technologies and capabilities currently serving retail markets in the ~~U.K.~~United Kingdom. Skratch is reported within the Technology Services and Solutions business unit in the Rail, Technologies, and Services segment.

On August 1, 2022, the Company ~~divested~~sold substantially all the operating assets of its Track Components business. Cash proceeds from the transaction were $7,795, subject to indemnification obligations and working capital adjustments and a loss on sale of $467 was recorded in “Other expense (income) - net.” The Track Components business was reported in the Rail Products business unit within the Rail, Technologies, and Services segment.

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On August 12, 2022, the Company acquired the operating assets of VanHooseCo Precast, LLC (“VanHooseCo”), a business specializing in precast concrete walls, water management products, and forms for the commercial and residential infrastructure markets for $52,146 net of cash acquired. VanHooseCo is included in the Company’s Precast Concrete Products segment.

On March 30, 2023, the Company sold substantially all the operating assets of its Chemtec Energy Services LLC (“Chemtec”) business for $5,344 in proceeds, subject to final working capital adjustments, generating a ~~$2,033~~$2,065 loss on sale, recorded in “Other expense (income) - ~~net.”~~net” for the nine months ended September 30, 2023. The Chemtec business was reported in the Coatings and Measurement business unit within the Steel Products and Measurement segment.

On June 30, 2023, the Company sold substantially all the operating assets of the prestressed concrete railroad tie business operated by its wholly-owned subsidiary, CXT Incorporated (“Ties”), located in Spokane, WA, for $2,362 in proceeds, subject to final working capital adjustments, generating a $1,009 loss on the sale, which was recorded in “Other expense (income) - net” for the nine months ended September 30, 2023. The Ties business was reported in the Rail Products business unit within the Rail, Technologies, and Services segment.

Results Summary

Net sales of ~~$115,488~~$145,345 for the three months ended ~~March 31,~~September 30, 2023, increased by ~~$16,694,~~$15,330, or ~~16.9%~~11.8%, over the prior year quarter. The change in sales is due in part to the ~~acquisitions~~acquisition of ~~Skratch and~~ VanHooseCo, offset by the divestiture of the Ties, Chemtec, and Track Components ~~business.~~businesses. Net sales for the three months ended September 30, 2023 included a $1,977 reduction stemming from changes in expected value of certain commercial projects associated with the exit of the bridge grid deck product line within the Steel Products and Measurement segment. Net sales for the three months ended September 30, 2022 included a $3,956 reduction from the settlement of certain long-term commercial contracts related to the multi-year Crossrail project in the Company’s Technology Services and Solutions business in the United Kingdom. Organic growth and acquisitions drove a ~~11.5%~~14.5% and ~~9.3%~~2.2% increase in sales over the prior year quarter, respectively, with an offsetting ~~3.9%~~4.8% decline from divestitures.

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Gross profit for the three months ended ~~March 31,~~September 30, 2023 was ~~$23,291,~~$28,224, an increase of ~~$6,844~~$5,127 over the prior year quarter, or ~~41.6%~~22.2%, and gross profit margins expanded by ~~360~~160 basis points to ~~20.2%~~19.4%. The improvement in gross profit was due to the portfolio changes that are a part of the Company’s strategic transformation, along with an uplift from increased sales volumes, product mix, and pricing. Gross profit for the three months ended September 30, 2023 included a reduction in profitability of $3,051 related to changes in expected value of certain commercial projects associated with the exit of the bridge grid deck product line in the Steel Products and Measurement segment. Gross profit for the three months ended September 30, 2022 included a non-routine adverse impact of $3,956 associated with the settlement of certain long-term commercial contracts related to the multi-year Crossrail project in the Company’s Technology Services and Solutions business in the United Kingdom, and expense of $851 associated with a purchase accounting adjustment related to acquired inventory from the acquisition of VanHooseCo within the Precast Concrete Products segment.

Selling and administrative expenses for the three months ended September 30, 2023 increased by $1,542, or 6.8%, from the prior year quarter, due primarily to increased personnel costs as well as a bad debt provision charge of $866 in the Rail, Technologies, and Services segment due to a customer in the United Kingdom that filed for administrative protection. The Company will continue to evaluate the collectibility of this account and will adjust the provision as required. Selling and administrative expenses as a percent of net sales were 16.6% versus 17.4% in the prior year quarter.

Other expense - net for the three months ended September 30, 2023 and 2022 was $917 and $168, respectively. Other expense - net for the three months ended September 30, 2023 was due to $1,069 in costs incurred from the exit of the bridge grid deck product line, which included $345 in inventory write-downs, $462 in personnel expenses, and $262 in other exit costs. The Company expects to incur an additional $520 of personnel expenses associated with the exit through 2024. Other expense - net for the three months ended September 30, 2022 was due to the $447 loss on the sale of Track Components, partially offset by foreign currency revaluation gains.

The Company’s effective income tax rate for the three months ended September 30, 2023 was (37.1)%, compared to 7.7% in the prior year quarter. The Company’s effective income tax rate for the three months ended September 30, 2023 differed from the federal statutory of 21% primarily due to changes in the valuation allowance established against U.S. and United Kingdom deferred tax assets. The Company maintains a valuation allowance against its U.S. and United Kingdom deferred tax assets, which is likely to result in significant variability of the effective tax rate in the current year.

Net income for the three months ended September 30, 2023 attributable to the Company was $515, or $0.05 per diluted share, favorable by $2,592, or $0.25 per diluted share, from the prior year quarter. Net income for the three months ended September 30, 2023 was primarily driven by increased sales volumes and gross profit expansion partially offset by an increase in selling and administrative expenses and $4,120 in exit costs impacting both gross profit and other expense - net incurred from the exit of the bridge grid deck product line.

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The Company continues to execute its strategic transformation into a technology-focused, high growth infrastructure solutions provider, as evidenced by the number of recent portfolio actions taken which further reduces the Company’s commoditized offerings to allow for increased focus on its core growth platforms, rail technologies and precast concrete, as well as organic growth initiatives, debt reduction, and improving shareholder value.

Results of Operations - Segment Analysis

Third Quarter 2023 Compared to Third Quarter 2022

Rail, Technologies, and Services


	Three Months Ended September 30,						Change			Percent Change
	2023			2022			2023 vs. 2022			2023 vs. 2022
Net sales	$	86,866		$	77,350		$	9,516		12.3	%
Gross profit	$	17,229		$	13,376		$	3,853		28.8	%
Gross profit margin	19.8		%	17.3		%	2.5		%	14.7	%
Segment operating profit	$	3,865		$	539		$	3,326		**
Segment operating profit margin	4.4		%	0.7		%	3.7		%	**

** Results of the calculation are not considered meaningful for presentation purposes.

The Rail, Technologies, and Services segment sales for the three months ended September 30, 2023 increased by $9,516, or 12.3%, compared to the prior year quarter. Net sales increased by 14.9% organically, partially offset by a 2.6% decrease from the divestitures of Track Components and Ties. Each of the three business units, Rail Products, Global Friction Management, and Technology Services and Solutions, had an increase in sales from the prior year quarter. The Rail Products and Global Friction Management sales increase was driven by strength in domestic markets served. The sales increase for Technology Services and Solutions was driven by an unfavorable settlement adjustment of $3,956 included in the prior year quarter for certain long-term commercial contracts related to the multi-year Crossrail project, partially offset by a decline in volumes, specifically in our United Kingdom business, in the current quarter.

The Rail, Technologies, and Services segment gross profit increased by $3,853, or 28.8% over the prior year quarter, and gross profit margins expanded 250 basis points to 19.8%. Gross profit improvement in Rail Products is due to the portfolio changes implemented as part of the Company’s strategic transformation, higher volumes, and improved pricing. The gross profit improvement in Global Friction Management was commensurate with higher sales levels. Gross profit improvement in Technology Services and Solutions is due to the adverse impact of $3,956 for certain long-term commercial contracts related to the multi-year Crossrail project incurred in the prior year quarter, offset by lower current quarter gross profit in the in the United Kingdom businesses, driven by unfavorable business mix and ongoing commercial weakness in the United Kingdom market. Operating profit was $3,865, a $3,326 increase over the prior year quarter, due to the commercial contract settlement in the prior year quarter, partially offset by a bad debt provision charge of $866 resulting from a customer in the United Kingdom that filed for administrative protection in the third quarter of 2023.

During the current quarter, the Rail, Technologies, and Services segment had a decrease in new orders of $6,711, or 11.9%, compared to the prior year quarter. The decrease is due to a $1,799 impact associated with the divestitures of Track Components and Ties as well as lower overall order rates in the Rail Products business, partially offset by order growth in the Technology Services and Solutions business. Backlog as of September 30, 2023 was $93,632, a decrease of $15,232, or 14.0%, versus the prior year quarter, driven by a decline in the Rail Products business unit, including a reduction of $7,091 related to the divestiture of Ties, partially offset by a 42.7% and 8.7% increase in Technology Services and Solutions and Global Friction Management backlog, respectively.

Precast Concrete Products


	Three Months Ended September 30,						Change			Percent Change
	2023			2022			2023 vs. 2022			2023 vs. 2022
Net sales	$	38,642		$	28,856		$	9,786		33.9	%
Gross profit	$	9,266		$	5,647		$	3,619		64.1	%
Gross profit margin	24.0		%	19.6		%	4.4		%	22.5	%
Segment operating profit	$	3,389		$	1,245		$	2,144		172.2	%
Segment operating profit margin	8.8		%	4.3		%	4.5		%	104.3	%

The Precast Concrete Products segment sales for the three months ended September 30, 2023 increased by $9,786, or 33.9%, compared to the prior year quarter. The VanHooseCo acquisition contributed $2,800, or 9.7%, of the increase in sales over the prior

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year quarter. Organic sales increased by $6,986, or 24.2%, which is a continued reflection of the strong demand environment in the southern and northeastern United States markets.

The Precast Concrete Products segment gross profit for the three months ended September 30, 2023 increased by $3,619, and gross profit margins expanded by 440 basis points to 24.0%. The improvement in gross profit is due to the VanHooseCo acquisition as well as overall sales volumes and the impact of improved pricing in the legacy precast business. The prior year quarter includes an expense of $851 associated with a purchase accounting adjustment related to the acquired VanHooseCo inventory. Operating profit for the third quarter of 2023 was $3,389, a $2,144 improvement over the prior year quarter, due to higher gross profit levels, which was partially offset by an increase in selling and administrative expenses.

During the quarter, the Precast Concrete Products segment had a decrease in new orders and backlog of 10.8% and 7.2%, respectively, compared to the prior year quarter. The decrease in new orders and backlog is due primarily to declines in the legacy businesses.

Steel Products and Measurement


	Three Months Ended September 30,						Change			Percent Change
	2023			2022			2023 vs. 2022			2023 vs. 2022
Net sales	$	19,837		$	23,809		$	(3,972)		(16.7)	%
Gross profit	$	1,729		$	4,074		$	(2,345)		(57.6)	%
Gross profit margin	8.7		%	17.1		%	(8.4)		%	(49.1)	%
Segment operating (loss) profit	$	(1,521)		$	303		$	(1,824)		**
Segment operating (loss) profit margin	(7.7)		%	1.3		%	(9.0)		%	**

** Results of the calculation are not considered meaningful for presentation purposes.

The Steel Products and Measurement segment sales for the three months ended September 30, 2023, decreased by $3,972, or 16.7%, compared to the prior year quarter. The decrease in sales for the third quarter of 2023 was attributable to the divestiture of Chemtec, which reduced sales by $4,275, and $1,977 stemming from changes in expected value of certain commercial projects associated with the exit of the bridge grid deck product line, partially offset by organic growth of $2,280 during the quarter.

Steel Products and Measurement gross profit for the three months ended September 30, 2023 decreased by $2,345, and gross profit margins decreased 840 basis points to 8.7%. This decline was driven by the reduction in profitability of $3,051 related to changes in expected value of certain commercial projects associated with the exit of the bridge grid deck product line. The segment operating loss was $1,521, unfavorable by $1,824 from the prior year quarter, due to the decline in gross profit, partially offset by lower selling and administrative expenses.

During the quarter, the Steel Products and Measurement segment had a decrease in new orders and backlog of $26,999, or 53.9%, and $8,105, or 10.5%, respectively, compared to the prior year quarter. The decrease in order levels was due to the divestiture of Chemtec, driving a decrease of $15,991, and the discontinued bridge grid deck product line, which had an order decline of $4,518, and a decline in the Company’s Protective Coatings business unit. The backlog decrease was due to the divestiture of the Chemtec business driving a decrease of $20,251, and the discontinued bridge grid deck product line, which had a backlog decrease of $5,405, partially offset by growth in the Protective Coatings business unit.

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Nine Month Results


	Nine Months Ended September 30,						Change
	2023			2022			2023 vs. 2022
Net sales	$	408,867		$	360,324		$	48,543
Gross profit	83,767			62,837			20,930
Gross profit margin	20.5		%	17.4		%	310 bps
Expenses:
Selling and administrative expenses	$	70,111		$	59,310		$	10,801
Selling and administrative expenses as a percent of sales	17.1		%	16.5		%	60 bps
Amortization expense	4,119			4,454			(335)
Operating profit (loss)	$	9,537		$	(927)		$	10,464
Operating profit (loss) margin	2.3		%	(0.3)		%	260 bps

Interest expense - net	$	4,404		$	1,747		$	2,657


Other expense (income) - net	3,463			(1,096)			4,559
Income (loss) before income taxes	$	1,670		$	(1,578)		$	3,248
Income tax (benefit) expense	(99)			137			(236)
Net income (loss)	$	1,769		$	(1,715)		$	3,484
Net loss attributable to noncontrolling interest	(125)			(82)			(43)
Net income (loss) attributable to L.B. Foster Company	$	1,894		$	(1,633)		$	3,527
Diluted earnings (loss) per common share	$	0.17		$	(0.16)		$	0.33

Results Summary

Net sales of $408,867 for the nine months ended September 30, 2023, increased by $48,543, or 13.5%, over the prior year period.Organic growth and acquisitions drove a 13.3% and 5.5% increase in sales over the prior year period, respectively, with an offsetting 5.3% decline from divestitures. The organic growth rate includes the adverse impact stemming from changes in expected value of certain commercial projects associated with the exit of the bridge grid deck product line within the Steel Products and Measurement segment by $1,977 and the $3,956 non-routine adverse impact on sales in the prior year from the settlement of certain long-term commercial contracts related to the multi-year Crossrail project in the Company’s Technology Services and Solutions business in the United Kingdom.

Gross profit for the nine months ended September 30, 2023 was $83,767, an increase of $20,930 over the prior year period, or 33.3%, and gross profit margins expanded by 310 basis points to 20.5%. The improvement in gross profit is due to the portfolio changes that are a part of the Company’s strategic transformation plan along with higher sales volume and improved product mix, input costs, and pricing. The current year gross profit includes the reduction in profitability of $3,051 related to changes in expected value of certain commercial projects associated with the exit of the bridge grid deck product line in the Steel Products and Measurement segment. The prior year gross profit includes the adverse impact of $3,956 associated with the settlement of certain long-term commercial contracts related to the multi-year Crossrail project in the Company’s Technology Services and Solutions business in the United Kingdom and an expense of $851 associated with a purchase accounting adjustment related to acquired inventory stemming from the acquisition of VanHooseCo within the Precast Concrete Products segment.

Selling and administrative expenses for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 increased by ~~$4,125,~~$10,801, or ~~23.8%~~18.2%, from the prior year quarter, due in part to the ~~acquisition~~acquisitions of VanHooseCo and Skratch, ~~as well as~~ higher personnel ~~expenses.~~expenses, and a bad debt provision charge of $866 due to a customer in the United Kingdom who filed for administrative protection in the Rail, Technologies, and Services segment. The Company will continue to evaluate the collectibility of this account and will adjust the provision as required. Selling and administrative expenses as a percent of net sales were ~~18.5%~~17.1% versus ~~17.5%~~16.5% in the prior year ~~quarter,~~period, a ~~100~~60 basis point increase. ~~The recent acquisitions have a higher margin portfolio and higher selling and administrative costs.~~

Other expense - net for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 was ~~$1,827~~$3,463 while other income - net was ~~$563~~$1,096 in the prior year quarter. Other expense - net for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 was due primarily to the ~~$2,033~~$3,074 loss on the ~~sale~~divestitures of Ties and Chemtec ~~during~~and $1,069 of exit costs incurred related to the ~~quarter.~~exit of the bridge grid deck product line, and other income - net for the nine months ended September 30, 2022 was due to a $489 divestiture gain and $790 in insurance proceeds.

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The Company’s effective income tax rate for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 was ~~19.9%~~(5.9)%, compared to ~~24.3%~~(8.7)% in the prior year ~~quarter. Due~~period. The Company’s effective tax rate for the nine months ended September 30, 2023 differed from the federal statutory rate of 21% primarily due to changes in the ~~full~~ valuation allowance ~~on domestic~~established against U.S. and United Kingdom deferred tax assets. The Company maintains a valuation allowance against its U.S. and United Kingdom deferred tax assets, which is likely to result in significant variability of the ~~Company’s~~effective tax ~~provision for~~rate in the ~~three months ended March 31, 2023 does not reflect any tax benefit for domestic pre-tax losses, and is primarily comprised of taxes related to our Canadian and United Kingdom operations.~~current year.

Net ~~loss~~income for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 attributable to the Company was ~~$2,152,~~$1,894, or ~~$0.20~~$0.17 per diluted share, ~~unfavorable~~favorable by ~~$586,~~$3,527, or ~~$0.05~~$0.33 per diluted share, from the prior year ~~quarter. The loss~~period. Net income was primarily driven by ~~the $2,033 loss on the sale of Chemtec during the three months ended March 31, 2023, which offset~~ stronger ~~comparable~~ operating profit stemming from margin ~~expansion.~~expansion during the nine months ended September 30, 2023, which was partially offset by a $3,074 loss on the divestitures of the Chemtec and Ties and $4,120 in exit costs impacting both gross profit and other expense (income) - net incurred from the exit of the bridge grid deck product line.

The Company continues to execute its strategic transformation into a technology-focused, high growth infrastructure solutions provider, as evidenced by the number of recent portfolio actions taken, including the ~~sale~~divestiture of Chemtec and Ties and the exit of the bridge grid deck product line, which ~~minimizes~~further reduces the ~~Company's exposure~~Company’s commoditized offerings to ~~the energy market and allows~~allow for ~~additional capacity to~~increased focus on its core growth platforms, ~~in Rail Technologies~~rail technologies and ~~Precast Concrete, and an increased focus on~~precast concrete, as well as organic growth initiatives, ~~and~~ debt reduction, ~~going into 2023. Proceeds from the Chemtec sale have contributed to the pay down of debt during the quarter~~ and ~~increased capacity under the credit agreement to further support its strategic initiatives.~~improving shareholder value.

Results of Operations - Segment Analysis

First ~~Quarter~~Nine Months 2023 Compared to First ~~Quarter~~Nine Months 2022

Rail, Technologies, and Services


		Three Months Ended March 31,						Change			Percent Change			Nine Months Ended September 30,						Change			Percent Change
		2023			2022			2023 vs. 2022			2023 vs. 2022			2023			2022			2023 vs. 2022			2023 vs. 2022
Net sales	Net sales	$	64,384		$	63,710		$	674		1.1	%	Net sales	$	242,866		$	222,857		$	20,009		9.0	%
Gross profit	Gross profit	$	14,284		$	12,528		$	1,756		14.0	%	Gross profit	$	51,360		$	41,564		$	9,796		23.6	%
Gross profit percentage		22.2		%	19.7		%	2.5		%	12.8	%
Gross profit margin													Gross profit margin	21.1		%	18.7		%	2.4		%	13.4	%
Segment operating profit	Segment operating profit	$	2,388		$	1,039		$	1,349		129.8	%	Segment operating profit	$	12,880		$	5,576		$	7,304		131.0	%
Segment operating profit percentage		3.7		%	1.6		%	2.1		%	131.3	%
Segment operating profit margin													Segment operating profit margin	5.3		%	2.5		%	2.8		%	112.0	%

The Rail, Technologies, and Services segment sales for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 increased by ~~$674,~~$20,009, or ~~1.1%~~9.0%, compared to the prior year ~~quarter.~~period. Net sales increased by ~~5.8%~~13.1% organically and by ~~1.3%~~0.7% from the acquisition of Skratch, offset by a ~~6.1%~~4.8% decrease from the ~~divestiture~~divestitures of Track ~~Components.~~ T~~he Global Friction Management business unit increase in sales was offset by sales decreases in the Technology Services~~Components and ~~Solutions business unit.~~Ties. The ~~Friction Management~~ sales increase was driven by Rail Products and Global Friction Management due to strength in domestic markets ~~served. The~~served, partially offset by a sales ~~decrease~~decline in ~~the~~ Technology Services and Solutions ~~business unit was driven by~~due to the completion of the multi-year Crossrail project in late ~~2022.~~2022 and weak economic conditions in the United Kingdom in 2023. Technology Services and Solutions sales in the nine months ended September 30, 2022 include a $3,956 reduction in sales from the settlement of certain long-term commercial contracts related to the multi-year Crossrail project.

The Rail, Technologies, and Services segment gross profit increased by ~~$1,756,~~$9,796, or ~~14.0%~~23.6%, over the prior year ~~quarter,~~period, and gross profit margins expanded ~~250~~240 basis points to ~~22.2%~~21.1%. Gross profit increases in Rail Products and Global Friction Management were commensurate with higher sales ~~levels, while weaker sale in~~levels. Technology Services and Solutions ~~drove a partially offsetting~~ gross profit ~~decline.~~declined year over year due to lower sales volumes, unfavorable business mix and ongoing commercial weakness in the United Kingdom market, partially offset by the $3,956 reduction in gross profit recorded in the prior year related to the settlement of certain long-term commercial contracts related to the multi-year Crossrail project. The overall improvement in gross profit is due to the portfolio changes that are a part of the Company’s strategic transformation, ~~along with~~ increased sales in the higher margin Global Friction Management business, ~~along with~~and improved pricing. Operating profit was ~~$2,388,~~$12,880, a ~~$1,349~~$7,304 increase over the prior year quarter, due primarily to higher gross profit levels.

During the nine months ended September 30, 2023, the Rail, Technologies, and Services segment had a slight decrease in new orders of $1,326, or 0.6%, compared to the prior year period. New orders declined $8,224 and $1,493 related to the divestitures of Track Components and Ties, respectively, which was almost entirely offset by strong order levels in the Global Friction Management and Technology Services and Solutions businesses. Backlog as of September 30, 2023 was $93,632, a decrease of $15,232, or 14.0%, versus the prior year period, driven by a decline in the Rail Products business, including a reduction of $7,091 related to the divestiture of Ties, partially offset by a 42.7% and 8.7% increase in Technology Services and Solutions and Global Friction Management backlog, respectively.

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During the current quarter, the Rail, Technologies, and Services segment had a decrease in new orders of $17,664, or 19.3%, compared to the prior year period. The decrease is due primarily to differences in customer order timing in the Rail Distribution business, as well as an unfavorable impact of $4,805 due to the Track Components divestiture. Backlog as of March 31, 2023 was $113,593, a decrease of $9,325, or 7.6%, versus the prior year quarter, $2,531 of which is related to the divested Track Components division.

Precast Concrete Products

Three Months Ended
March 31, Change Percent
Change
2023 2022 2023 vs. 2022 2023 vs. 2022
Net sales $ 24,288 $ 15,010 $ 9,278 61.8 %
Gross profit $ 5,521 $ 2,445 $ 3,076 125.8 %
Gross profit percentage 22.7 % 16.3 % 6.4 % 39.5 %
Segment operating loss $ (348) $ (791) $ 443 56.0 %
Segment operating loss percentage (1.4) % (5.3 %) 3.9 % 73.6 %


	Nine Months Ended September 30,						Change			Percent Change
	2023			2022			2023 vs. 2022			2023 vs. 2022
Net sales	$	96,795		$	67,477		$	29,318		43.4	%
Gross profit	$	22,463		$	11,439		$	11,024		96.4	%
Gross profit margin	23.2		%	17.0		%	6.2		%	36.9	%
Segment operating profit	$	4,337		$	329		$	4,008		**
Segment operating profit margin	4.5		%	0.5		%	4.0		%	**

** Results of the calculation are not considered meaningful for presentation purposes.

The Precast Concrete Products segment sales for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 increased by ~~$9,278,~~$29,318, or ~~61.8%~~43.4%, compared to the prior year ~~quarter.~~period. The VanHooseCo acquisition contributed ~~$8,299, or 55.3%,~~27.2% of the increase in sales over the prior year ~~quarter.~~period. Organic sales increased by ~~$979, or 6.5%~~16.3%, which is a continued reflection of the strong demand environment in the southern and northeastern United States markets.

The Precast Concrete Products ~~segment's~~segment’s gross profit for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 increased by ~~$3,076,~~$11,024, and gross profit margins expanded by ~~640~~620 basis points to ~~22.7%~~23.2%. The improvement in gross profit is due to the VanHooseCo acquisition as well as overall sales volumes and stronger margins from the legacy precast business, including the impact of improved pricing. Operating ~~loss~~profit for the ~~first quarter of~~nine months ended September 30, 2023 was ~~$348,~~$4,337, a ~~$443~~$4,008 improvement over the prior year ~~quarter,~~period, due to higher gross profit levels, which was partially offset by an increase in selling and administrative expenses from the VanHooseCo acquisition, as well as increased personnel expenses.

During the quarter, the Precast Concrete Products segment had an increase in new orders ~~and backlog~~ of ~~89.2% and 21.2%, respectively, compared to the prior year quarter. The increase in new orders and backlog is~~39.4% due to both the VanHooseCo acquisition and strong demand in the legacy business. As of September 30, 2023, backlog decreased by 7.2%, driven by the legacy businesses, which was partially offset by uplift from the VanHooseCo acquisition.

Steel Products and Measurement

Three Months Ended
March 31, Change Percent
Change
2023 2022 2023 vs. 2022 2023 vs. 2022
Net sales $ 26,816 $ 20,074 $ 6,742 33.6 %
Gross profit $ 3,486 $ 1,474 $ 2,012 136.5 %
Gross profit percentage 13.0 % 7.3 % 5.7 % 77.0 %
Segment operating loss $ (8) $ (2,148) $ 2,140 99.6 %
Segment operating loss percentage 0.0 % (10.7) % 10.7 % 100.0 %


	Nine Months Ended September 30,						Change			Percent Change
	2023			2022			2023 vs. 2022			2023 vs. 2022
Net Sales	$	69,206		$	69,990		$	(784)		(1.1)	%
Gross profit	$	9,944		$	9,834		$	110		1.1	%
Gross profit margin	14.4		%	14.1		%	0.3		%	2.3	%
Segment operating loss	$	(73)		$	(1,083)		$	1,010		93.3	%
Segment operating loss margin	(0.1)		%	(1.5)		%	1.4		%	93.2	%

The Steel Products and Measurement segment sales for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 ~~increased~~decreased by ~~$6,742,~~$784, or ~~33.6%~~1.1%, compared to the prior year quarter. The ~~increase~~decrease in sales for the ~~first quarter of~~nine months ended September 30, 2023 was ~~attributable~~due to a reduction of $8,451 from the ~~$8,819~~Chemtec divestiture and $1,977 stemming from changes in expected value of certain commercial projects associated with the exit of the bridge grid deck product line, which was almost entirely offset by an increase in Coatings and Measurement sales over the prior year quarter, due to increased activity in both traditional and adjacent market applications. This increase was partially offset by a decrease in Fabricated Steel Products business unit sales of $2,087.Protective Coatings.

Steel Products and Measurement gross profit for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 increased by ~~$2,012,~~$110, and gross profit margins increased ~~570~~30 basis points to ~~13.0%~~14.4%. ~~The increase~~Gross profit for the nine months ended September 30, 2023 included growth in ~~gross profit is primarily~~Protective Coatings due to stronger margins and higher sales volume, partially offset by an adverse impact of $3,051 related to changes in expected value of certain commercial projects associated with the ~~Protective Coatings division attributable~~exit of the bridge grid deck product line and a reduction of $560 due to ~~higher volumes.~~the Chemtec divestiture. The segment operating loss was ~~reduced $2,140~~favorable $1,010 from the prior year ~~quarter,~~period, due to higher gross profit ~~levels.~~levels and a decrease in selling and administrative expenses.

During the quarter, the Steel Products and Measurement segment had ~~an increase~~a decrease in new orders and backlog of ~~$4,697,~~$17,942, or ~~18.9%~~17.8%, and ~~$9,220,~~$8,105, or ~~18.7%~~10.5%, respectively, compared to the prior year ~~quarter.~~period. The ~~increase is~~divestiture of Chemtec during the first quarter of 2023 resulted in a ~~result~~reduction in new orders and backlog of ~~improved order levels~~$22,014 and $20,251, respectively, from the prior year period. Strong demand in ~~the Fabricated Steel Products business unit and~~ the Protective Coatings division, ~~due to strong demand~~ in both traditional and ~~adjacent~~expanded market ~~applications. The backlog increase was~~applications, partially offset ~~by a $5,657~~the decrease ~~due to~~in new orders and backlog from the Chemtec divestiture.

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Liquidity and Capital Resources

The Company’s principal sources of liquidity are its existing cash and cash equivalents, cash generated by operations, and the available capacity under the revolving credit facility, which provides for a total commitment of up to $130,000, of which ~~$49,091~~$55,980 was available for borrowing as of ~~March 31,~~September 30, 2023, subject to covenant restrictions. The Company’s primary needs for liquidity relate to working capital requirements for operations, capital expenditures, debt service obligations, payments related to the Union Pacific Railroad Settlement, and acquisitions. The Company’s total debt, including finance leases, was ~~$80,096~~$71,689 and $91,879 as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively, and was primarily comprised of borrowings under its revolving credit facility.

The following table reflects available funding capacity, subject to covenant restrictions, as of ~~March 31,~~September 30, 2023:

~~March 31,~~September 30, 2023

Cash and cash equivalents

~~2,639~~2,969

Credit agreement:

Total availability under the credit agreement

130,000

Outstanding borrowings on revolving credit facility

~~(79,825)~~(71,476)

Letters of credit outstanding

~~(1,084)~~(2,544)

Net availability under the revolving credit facility

~~49,091~~55,980

Total available funding capacity

~~51,730~~58,949

The Company’s cash flows are impacted from period to period by fluctuations in working capital, as well as its overall profitability. While the Company places an emphasis on working capital management in its operations, factors such as its contract mix, commercial terms, days sales outstanding (“DSO”), and market conditions as well as seasonality may impact its working capital. The Company regularly assesses its receivables and contract assets for collectability and realization, and provides allowances for credit losses where appropriate. The Company believes that its reserves for credit losses are appropriate as of ~~March 31,~~September 30, 2023, but adverse changes in the economic environment and adverse financial conditions of its customers may impact certain of its customers’ ability to access capital and pay the Company for its products and services, as well as impact demand for its products and services.

The changes in cash and cash equivalents for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022 were as follows:


		Three Months Ended March 31,					Nine Months Ended September 30,
		2023		2022			2023		2022
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	$	6,932	$	(7,636)	Net cash provided by (used in) operating activities	$	15,310	$	(18,836)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	4,661		(539)		Net cash provided by (used in) investing activities	5,798		(54,061)
Net cash (used in) provided by financing activities	Net cash (used in) provided by financing activities	(12,022)		4,012		Net cash (used in) provided by financing activities	(21,121)		68,568
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	186		30		Effect of exchange rate changes on cash and cash equivalents	100		(1,100)

Net decrease in cash and cash equivalents		$	(243)	$	(4,133)
Net increase (decrease) in cash and cash equivalents						Net increase (decrease) in cash and cash equivalents	$	87	$	(5,429)

Cash Flow from Operating Activities

During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, net cash provided by operating activities was ~~$6,932,~~$15,310, compared to cash used inby operating activities of ~~$7,636~~$18,836 during the prior year period. For the ~~three~~nine months ended ~~March 31,~~September 30, 2023, net ~~loss~~income and adjustments to reconcile net ~~loss~~income from operating activities provided ~~$3,352,~~$16,850, compared to ~~$1,408~~$9,134 in the prior year period. Working capital and other assets and liabilities ~~provided $3,580~~used $1,540 in the current period, compared to using ~~$9,044~~$27,970 in the prior year period. The Company received ~~$2,967~~$2,973 during the ~~three~~nine months ended ~~March 31,~~September 30, 2023 associated with its federal income tax refund claims, which have now been collected in full.

Cash Flow from Investing Activities

Capital expenditures for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022 were ~~$699~~$2,784 and ~~$1,764,~~$4,559, respectively. The current period expenditures primarily relate to general plant and operational improvements throughout the Company, ~~including corporate system and facility improvements.~~as well as organic growth initiatives. Expenditures for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 primarily related to ~~the implementation of the enterprise resource planning system at additional Company divisions and~~ general plant and operational improvements throughout the ~~Company. On March~~Company, including corporate system and facility improvements and organic growth initiatives. During the nine months ended September 30, 2023, the Company divested the assets of its Chemtec ~~business,~~and Ties businesses, generating a cash inflow of ~~$5,344 during~~$7,706. During the ~~three~~nine months ended ~~March 31, 2023.~~September 30, 2023 the Company received proceeds of $337 from final working capital adjustments related to prior year acquisitions. During the nine months ended September 30, 2022 the Company received cash proceeds from the Track Components divestiture and final proceeds from the 2021 Piling Products divestiture totaling $8,800. During the nine months ended September 30, 2022, the Company had $58,561 in cash outflows for the acquisition of Skratch and VanHooseCo.

Table of Contents

Cash Flow from Financing Activities

~~Table of Contents~~

During the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, the Company had a decrease in outstanding debt of ~~$12,047~~$20,262 and an increase of ~~$4,409,~~$69,155, respectively. The decrease in debt for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 was primarily due to ~~both stronger operating~~ cash ~~flows~~provided by operations, as well as proceeds received from the Ties and Chemtec ~~divestiture~~divestitures during the ~~quarter.~~period, which were used to pay down debt. The increase in debt for the 2022 period was due largely to the ~~result~~acquisition of VanHooseCo on August 12, 2022, as well as the acquisition of Skratch on June 21, 2022, and the funding of working capital and other assets and liabilities. Treasury stock acquisitions of ~~$309~~$1,193 and ~~$397~~$405 for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, respectively, represent stock repurchases from employees to satisfy their income tax withholdings in connection with the vesting of stock awards.

During the first quarter of 2023, the Company’s Board of Directors authorized the repurchase of up to $15,000 of the Company’s common stock in open market transactions through February 2026. Repurchases are limited to up to $5,000 in any trailing 12-month period, with unused amounts carrying forward to future periods through the end of the authorization. Any repurchases will be subject to the Company’s liquidity, including availability of borrowings and covenant compliance under its revolving credit facility, and other capital needs of the business.~~No shares were repurchased in the first quarter of 2023 as part of~~ In connection with the stock repurchase ~~program.~~program, 63,343 shares valued at $878 were repurchased during the nine months ended September 30, 2023.

Repurchases of shares of the Company’s common stock may be made from time to time in the open market or in such other manner as determined by the Company. The timing of the repurchases and the actual amount repurchased will depend on a variety of factors, including the market price of the Company’s shares, general market and economic conditions, and other factors. The stock repurchase program does not obligate the Company to acquire any particular amount of common stock and may be suspended or discontinued at any time.

Financial Condition

As of ~~March 31,~~September 30, 2023, the Company had ~~$2,639~~$2,969 in cash and cash equivalents. The Company’s cash management priority continues to be short-term maturities and the preservation of its principal balances. As of ~~March 31,~~September 30, 2023, approximately ~~$2,136~~$2,243 of the Company’s cash and cash equivalents were held in non-domestic bank accounts. The Company principally maintains its cash and cash equivalents in accounts held by major banks and financial institutions.

The Company’s principal uses of cash have been to fund its operations, including capital expenditures, acquisitions, and to service its indebtedness. The Company views its liquidity as being dependent on its results of operations, changes in working capital needs, and its borrowing capacity. As of ~~March 31,~~September 30, 2023, the Company's revolving credit facility had ~~$49,091~~$55,980 of net availability, while the Company had ~~$80,096~~$71,689 in total debt.

On August 13, 2021, the Company entered into the Credit Agreement, which increased the total commitments under the revolving credit facility to $130,000, ~~from $115,000,~~ extended the maturity date from April 30, 2024 to August 13, 2026, and provided more favorable covenant terms. Borrowings under the Credit Agreement bear interest rates based upon either the base rate or SOFR rate plus applicable margins. The Company believes that the combination of its cash and cash equivalents, cash generated from operations, and the capacity under its revolving credit facility should provide the Company with sufficient liquidity to provide the flexibility to operate the business in a prudent manner and enable the Company to continue to service its outstanding debt. On August 12, 2022, the Company amended its Credit Agreement to obtain approval for the VanHooseCo acquisition and temporarily modify certain financial covenants to accommodate the transaction. The Second Amendment permitted the Company to acquire the operating assets of VanHooseCo and modified the maximum Gross Leverage Ratio covenant ~~to 3.75~~ through June 30, 2023 to accommodate the transaction. The Second Amendment also added an additional tier to the pricing grid and provided for the conversion from LIBOR-based to SOFR-based borrowings. For a discussion of the terms and availability of the credit facilities, please refer to Note 7 of the Notes to Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q.

To reduce the impact of interest rate changes on outstanding variable-rate debt, the Company amended and entered into SOFR-based interest rate swaps with notional values totaling $20,000 and $20,000, effective August 12, 2022 and August 31, 2022, respectively, at which point the agreements effectively converted a portion of the debt from variable to fixed-rate borrowings during the term of the swap contract.

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Table of Contents

Segment Backlog

Total Company backlog is summarized by business segment in the following table for the periods indicated:


		Backlog							Backlog
		March 31, 2023		December 31, 2022		March 31, 2022			September 30, 2023		December 31, 2022		September 30, 2022
Rail, Technologies, and Services	Rail, Technologies, and Services	$	113,593	$	105,241	$	122,918	Rail, Technologies, and Services	$	93,632	$	105,241	$	108,864
Precast Concrete Products	Precast Concrete Products	87,737		80,501		72,369		Precast Concrete Products	80,391		80,501		86,612
Steel Products and Measurement	Steel Products and Measurement	58,551		86,509		49,331		Steel Products and Measurement	69,196		86,509		77,301
Total backlog	Total backlog	$	259,881	$	272,251	$	244,618	Total backlog	$	243,219	$	272,251	$	272,777

The Company’s backlog represents the sales price of received customer purchase orders and any contracts for which the performance obligations have not been met, and therefore are precluded from revenue recognition. Although the Company believes that the orders included in backlog are firm, customers may cancel or change their orders with limited advance notice; however, these instances have been rare. Backlog should not be considered a reliable indicator of the Company’s ability to achieve any particular level of revenue or financial performance. While a considerable portion of the Company’s business is backlog-driven, certain product lines within the Company are not driven by backlog as the orders are fulfilled shortly after they are received.

The Company defines new orders as a contractual agreement between the Company and a third-party in which the Company will, or has the ability to, satisfy the performance obligations of the promised products or services under the terms of the agreement.

Critical Accounting Estimates

The Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States. When more than one accounting principle, or method of its application, is generally accepted, management selects the principle or method that, in its opinion, is appropriate in the Company’s specific circumstances. Application of these accounting principles requires management to reach opinions regarding estimates about the future resolution of existing uncertainties. As a result, actual results could differ from these estimates. In preparing these financial statements, management has reached its opinions regarding the best estimates and judgments of the amounts and disclosures included in the financial statements giving due regard to materiality. A summary of the Company’s critical accounting policies and estimates is included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

This item is not applicable to a smaller reporting company.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

L.B. Foster Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of ~~March 31,~~September 30, 2023. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of such date such that the information required to be disclosed by the Company in reports filed under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to management, including the chief executive officer, chief financial officer, or person performing such functions, as appropriate to allow timely decisions regarding disclosure.

Changes in Internal Control Over Financial Reporting

~~There~~The Company has integrated VanHooseCo and Skratch into its controls and procedures. Otherwise, there were no changes to our “internal control over financial reporting” (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the ~~three~~nine months ended ~~March 31,~~September 30, 2023, and that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Table of Contents

PART II. OTHER INFORMATION

(Dollars in thousands, except share data)

Item 1. Legal Proceedings

See Note 13 of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Item 1A. Risk Factors

This item is not applicable to a smaller reporting company.

Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities

The Company’s purchases of equity securities for the three months ended ~~March 31,~~September 30, 2023 were as follows:

Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs (2) Approximate dollar value of shares that may yet be purchased under the plans or programs
January 1, 2023 - January 31, 2023 1,126 $ 10.49 — $ 15,000
February 1, 2023 - February 28, 2023 18,632 12.80 — 15,000
March 1, 2023 - March 31, 2023 4,687 12.52 — 15,000
Total 24,445 $ 12.64 — $ 15,000


	Total number of shares purchased (1)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs (2)	Approximate dollar value of shares that may yet be purchased under the plans or programs
July 1, 2023 - July 31, 2023	—	$	—	—	$	14,338
August 1, 2023 - August 31, 2023	—	—		4,549	14,258
September 1, 2023 - September 30, 2023	—	—		7,553	14,122
Total	—	$	—	12,102	$	14,122

1.Reflects shares withheld by the Company to pay taxes upon vesting of restricted stock.

2.On March 3, 2023, the Board of Directors authorized the repurchase of up to $15,000 of the Company’s common shares until February 2026.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

This item is not applicable to the Company.

Item 5. Other Information

~~None.~~Trading Arrangements

None of the Company’s directors or “officers,” as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K, during the Company’s fiscal quarter ended September 30, 2023.

2432

Table of Contents

Item 6. Exhibits

See Exhibit Index below.

Exhibit Index


Exhibit Number						Description
*10.1						~~2023~~ Executive Annual Incentive ~~Plan.~~Compensation Plan (As Amended and Restated October 24, 2023).**

*10.2						~~Form of Restricted Stock Award Agreement (2023)~~Supplemental Executive Retirement Plan (As Amended and Restated October 24, 2023).**

*10.3						~~Form of Performance Share Unit Award Agreement~~Key Employee Separation Plan (As Amended and ~~Long Term~~Restated October 24, 2023).**

*10.4						Amended and Restated Executive Recoupment Policy (October 24, 2023).**

*10.5						2022 Equity and Incentive ~~Performance Share Unit Program (2023-2025)~~Compensation Plan (As Amended October 24, 2023).**

*10.6						2023 Executive Annual Incentive Plan (October 24, 2023).**

*31.1						Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.

*31.2						Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.

*32.0						Certification of Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.

*101.INS						XBRL Instance Document-the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

*101.SCH						XBRL Taxonomy Extension Schema Document.

*101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document.

*101.DEF						XBRL Taxonomy Extension Definition Linkbase Document.

*101.LAB						XBRL Taxonomy Extension Label Linkbase Document.

*101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document.

*104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


*			Exhibits marked with an asterisk are filed herewith.
**			Exhibit represents a management contract or compensatory plan, contract, or arrangement.

2533

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		L.B. FOSTER COMPANY
		(Registrant)

Date:	~~May 10,~~November 7, 2023	By: /s/ William M. Thalman
		William M. Thalman
		~~Senior~~Executive Vice President
		and Chief Financial Officer
		(Duly Authorized Officer of Registrant)

2634


	March 31, 2023
	Weighted Average Amortization Period In Years	Gross Carrying Value		Accumulated Amortization		Net Carrying Amount
Non-compete agreements	1	$	27	$	(23)	$	4
Patents	10	330		(187)		143
Customer relationships	16	27,413		(14,965)		12,448
Trademarks and trade names	16	7,957		(4,142)		3,815
Technology	14	32,253		(26,405)		5,848
Favorable lease	6	327		(36)		291
		$	68,307	$	(45,758)	$	22,549


	Three Months Ended March 31,				Percent Change		Percent of Total Net Sales Three Months Ended March 31,
	2023		2022		2023 vs. 2022		2023		2022
Net sales	$	115,488	$	98,794	16.9	%	100.0	%	100.0	%
Gross profit	23,291		16,447		41.6		20.2		16.6
Expenses:
Selling and administrative expenses	21,423		17,298		23.8		18.5		17.5
Amortization expense	1,365		1,436		(4.9)		1.2		1.5
Operating profit (loss)	503		(2,287)		122.0		0.4		(2.3)

Interest expense - net	1,388		370		**		1.2		0.4


Other expense (income) - net	1,827		(563)		**		1.6		(0.6)

Loss before income taxes	(2,712)		(2,094)		(29.5)		(2.3)		(2.1)
Income tax benefit	(541)		(508)		(6.5)		(0.5)		(0.5)
Net loss	(2,171)		(1,586)		(36.9)		(1.9)		(1.6)
Net loss attributable to noncontrolling interest	(19)		(20)		5.0		(0.0)		(0.0)
Net loss attributable to L.B. Foster Company	$	(2,152)	$	(1,566)	(37.4	%)	(1.9	%)	(1.6	%)
Diluted loss per common share	$	(0.20)	$	(0.15)