L.B. Foster Company Reports Modest Sales Growth but Declining Profitability in Q2 2025

L.B. Foster Company reported its financial results for the second quarter and first half of 2025, revealing a modest increase in net sales but a significant decline in profitability compared to the previous year. For the three months ended June 30, 2025, total net sales reached $143.6 million, a 2.0% increase from $140.8 million in the same period of 2024. However, net income attributable to L.B. Foster Company was $2.9 million, or $0.27 per diluted share, reflecting a slight increase from $2.8 million, or $0.26 per diluted share, in the prior year. The six-month results showed a decline in net income to $0.8 million, down from $7.3 million in 2024, primarily due to lower sales and increased tax expenses.

The company's performance was impacted by contrasting results across its two segments. The Infrastructure Solutions segment saw a notable increase in sales, up 22.4% to $67.6 million, driven by strong demand for Precast Concrete Products. Conversely, the Rail, Technologies, and Services segment experienced a decline in sales of 11.2%, totaling $76.0 million, attributed to reduced volumes in Rail Products and Technology Services, particularly in the UK market. The overall gross profit for the quarter increased slightly to $30.9 million, but gross profit margins fell to 21.5%, down from 21.7% a year earlier, due to costs associated with the exit of the Automation and Materials Handling product line.

In terms of operational developments, L.B. Foster announced the discontinuation of its Automation and Materials Handling product line, which had generated $813,000 in sales during the second quarter. The company incurred $1.4 million in exit costs related to this decision, which included inventory write-downs and personnel expenses. Additionally, the company made a deferred payment of $782,000 related to its acquisition of Skratch Enterprises Ltd. in 2022. The restructuring efforts, which were completed by the end of 2024, have led to a reduction in corporate executive management costs and other expenses.

As of June 30, 2025, L.B. Foster reported total assets of $349.9 million, an increase from $334.6 million at the end of 2024. The company’s total debt rose to $81.6 million, up from $46.9 million, primarily due to increased borrowings under its revolving credit facility. The company had $4.2 million in cash and cash equivalents and $68.1 million available under its credit agreement, indicating a solid liquidity position despite the increased debt levels.

Looking ahead, L.B. Foster remains cautious about its outlook, citing potential risks from economic conditions, market volatility, and ongoing restructuring efforts. The company emphasized its commitment to managing working capital effectively and maintaining compliance with its credit agreement covenants. The management's focus will be on leveraging growth opportunities in the Infrastructure segment while addressing challenges in the Rail segment, particularly in international markets.