L.B. Foster Company Reports 21.3% Decline in Q1 2025 Net Sales

L.B. Foster Company reported a significant decline in financial performance for the first quarter of 2025, with total net sales of $97.8 million, down 21.3% from $124.3 million in the same period last year. The decrease was primarily driven by a 34.6% drop in the Rail segment, which saw sales fall to $54.0 million from $82.6 million. In contrast, the Infrastructure Solutions segment experienced a modest increase of 5.0%, reaching $43.8 million, up from $41.7 million. The company's gross profit also fell to $20.2 million, a decrease of 23.0% year-over-year, resulting in a gross profit margin of 20.6%, down from 21.1%.

The company's operating loss for the quarter was $1.9 million, compared to an operating income of $5.6 million in the prior year. This shift was attributed to lower sales volumes, particularly in the Rail segment, which has historically been more profitable. Selling and administrative expenses decreased by 8.4% to $21.0 million, but as a percentage of sales, these expenses rose to 21.4% from 18.4% due to the decline in revenue. The net loss attributable to L.B. Foster Company was $2.1 million, or $0.20 per diluted share, compared to a net income of $4.4 million, or $0.40 per diluted share, in the previous year.

In terms of operational developments, L.B. Foster's backlog increased to $237.2 million as of March 31, 2025, up from $222.3 million a year earlier. This growth was driven by a 6.6% increase in the Rail segment's backlog and a 6.8% increase in the Infrastructure Solutions segment. The company also reported new orders of $149.1 million for the quarter, reflecting a 35.3% increase in the Infrastructure segment, while the Rail segment saw a slight decline in new orders.

Strategically, L.B. Foster announced the discontinuation of its Bridge Products grid deck product line in August 2023, which is expected to complete any remaining customer obligations in 2025. The company continues to focus on its core segments, with ongoing investments in operational improvements and a new stock repurchase program authorized for up to $40 million through February 2028. Looking ahead, L.B. Foster's management remains cautious, citing potential risks from economic conditions, market volatility, and operational challenges, while emphasizing their commitment to improving financial performance and operational efficiency.