L.B. Foster (NASDAQ: FSTR) reported Q4 EPS of $0.21, versus $0.01 reported last year. Revenue for the quarter came in at $123.9 million, versus $113.4 million reported last year.

• Net loss of $41.2 million, or $3.97 loss per diluted share, reflecting the settlement of the concrete tie warranty claim with Union Pacific Railroad (“UPRR”), as discussed below.
• Adjusted net income1 of $2.2 million, or $0.21 income per adjusted diluted share1, excluding the effect of the UPRR settlement.
• Results include $43.4 million expense recognized as a result of the settlement of the concrete tie warranty claim with UPRR.
• New orders increased by 20.2% from the prior year quarter.
• Sales increased by 16.4% from the prior year quarter to $164.5 million.
• Fourth quarter gross profit increased by $2.4 million, or 8.6%, over the prior year quarter.
• Adjusted EBITDA1 for the fourth quarter, excluding the effect of the UPRR settlement, increased 6.8% over the prior year quarter.

Bob Bauer, President and Chief Executive Officer, commented, “The Company has reached a settlement with Union Pacific for warranty claims related to previously manufactured concrete ties at our Grand Island, Nebraska facility. I am pleased that we found a way to settle this dispute that restores the commercial relationship between our two companies. Our Board of Directors and management of the Company believe that this settlement agreement is in the best long-term interest of our shareholders, particularly since it includes the restoration of our commercial relationship with Union Pacific along with resolving all past and future claims regarding concrete ties. The entire L.B. Foster team is looking forward to conducting business with Union Pacific once again.

“The Company's success in key markets coupled with actions to improve efficiency in 2018 resulted in another year of improvement in underlying profit and strengthening of our balance sheet. Sales growth of 16.4% in the fourth quarter helped drive a gross profit increase of 8.6% and an adjusted EBITDA increase of 6.8% in the quarter over the prior year. This helped us complete a year with 16.9% sales growth, and a 9.2% increase in adjusted EBITDA to $41.4 million. New orders grew in each of our three reporting segments resulting in record levels for new orders and backlog, and a backlog increase of 32.1% over the prior year.

“All three reporting segments combined to drive operating cash flow for the year of $26.0 million. The focus on working capital efficiency was instrumental as minimal increase in working capital was needed to fund $90.6 million in sales growth. These results helped strengthen our balance sheet, reducing debt by $55.0 million and exceeding our target of reducing net debt to below $65.0 million. The Company’s Net Debt to adjusted EBITDA ratio ended the year at 1.6x.”

Mr. Bauer added, “Throughout the year we capitalized on growth opportunities winning a number of new transit rail projects, expanding our rail services footprint in the U.S. and Europe, and successfully completing numerous projects that will support midstream pipeline growth needed for U.S. oil and gas transport. We are continuing to invest in expanding our service and solutions offerings in the more attractive segments we serve. Coupled with our modernization programs, these efforts are a key component of our value creation strategy.”

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