What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-08 compared with 2022-08-09 · 254 added, 156 removed, 551 unchanged (43% of the section changed)

3 unchanged sentences

(In thousands, except share data)

September 30,

2022 December 31,

30 unchanged sentences

Common stock, par value $ 0.01 , authorized 20,000,000 shares;

shares issued at June 30, 2022 and December 31, 2021, 11,115,779 ;

shares outstanding at June 30, 2022 and December 31, 2021, 10,730,950 and 10,670,343 , respectively

shares issued at September 30, 2022 and December 31, 2021, 11,115,779 ;

shares outstanding at September 30, 2022 and December 31, 2021, 10,731,555 and 10,670,343 , respectively

Paid-in capital 42,608 43,272

Retained earnings 167,100 168,733

Treasury stock - at cost, 384,829 and 445,436 common stock shares at June 30, 2022 and December 31, 2021, respectively

Treasury stock - at cost, 384,224 and 445,436 common stock shares at September 30, 2022 and December 31, 2021, respectively

( 8,351 ) ( 10,179 )

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

8 unchanged sentences

Amortization expense 1,599 1,462 4,454 4,397

Operating profit 2,480 4,924 193 4,263

Operating (loss) profit ( 1,120 ) 758 ( 927 ) 5,021

Interest expense - net 993 722 1,747 2,454

Other (income) expense - net ( 701 ) 70 ( 1,264 ) 129

Income before income taxes 2,797 3,993 703 2,402

Income tax expense 821 1,139 313 818

Net income 1,976 2,854 390 1,584

Other expense (income) - net 168 ( 2,880 ) ( 1,096 ) ( 2,751 )

(Loss) income from continuing operations before income taxes ( 2,281 ) 2,916 ( 1,578 ) 5,318

Income tax (benefit) expense from continuing operations ( 176 ) 676 137 1,494

Net (loss) income from continuing operations ( 2,105 ) 2,240 ( 1,715 ) 3,824

Net loss attributable to noncontrolling interest ( 28 ) ( 30 ) ( 82 ) ( 64 )

Net income attributable to L.B.

(Loss) income from continuing operations attributable to L.B.

Foster Company ( 2,077 ) 2,270 ( 1,633 ) 3,888

Basic earnings per common share $ 0.18 $ 0.27 $ 0.04 $ 0.15

Diluted earnings per common share $ 0.18 $ 0.27 $ 0.04 $ 0.15

Discontinued operations:

Income from discontinued operations before income taxes — 72 — 72

Income tax benefit from discontinued operations — — — —

Income from discontinued operations — 72 — 72

Net (loss) income attributable to L.B.

Foster Company $ ( 2,077 ) $ 2,342 $ ( 1,633 ) $ 3,960

Basic (loss) earnings per common share:

From continuing operations $ ( 0.20 ) $ 0.21 $ ( 0.16 ) $ 0.36

From discontinued operations — 0.01 — 0.01

Basic (loss) earnings per common share $ ( 0.20 ) $ 0.22 $ ( 0.16 ) $ 0.37

Diluted (loss) earnings per common share:

From continuing operations $ ( 0.20 ) $ 0.21 $ ( 0.16 ) $ 0.36

From discontinued operations — 0.01 — 0.01

Diluted (loss) earnings per common share $ ( 0.20 ) $ 0.22 $ ( 0.16 ) $ 0.37

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

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net income $ 1,976 $ 2,854 $ 390 $ 1,584

Net (loss) income $ ( 2,105 ) $ 2,312 $ ( 1,715 ) $ 3,896

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment ( 4,341 ) ( 1,610 ) ( 8,933 ) ( 649 )

Unrealized gain on cash flow hedges, net of tax expense of $ 50 , $ 0 , $ 238 ,and $ 0 , respectively

Unrealized gain (loss) on cash flow hedges, net of tax (expense) benefit of $( 217 ), $ 11 , $( 455 ),and $ 11 , respectively

632 ( 33 ) 1,330 ( 33 )

Cash flow hedges reclassified to earnings, net of tax expense of $ 0 , $ 99 , $ 66 , and $ 295 , respectively

Reclassification of pension liability adjustments to earnings, net of tax expense of $ 8 , $ 23 , $ 40 , and $ 71 , respectively*

50 92 149 274

Total comprehensive (loss) income ( 5,764 ) 897 ( 9,076 ) 3,897

Less comprehensive income (loss) attributable to noncontrolling interest:

Less comprehensive (loss) income attributable to noncontrolling interest:

Net loss attributable to noncontrolling interest ( 28 ) ( 30 ) ( 82 ) ( 64 )

8 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 390 $ 1,584

Adjustments to reconcile net income to cash (used in) provided by operating activities:

Net (loss) income $ ( 1,715 ) $ 3,824

Adjustments to reconcile net (loss) income to cash (used in) provided by operating activities:

Deferred income taxes ( 962 ) 526

4 unchanged sentences

Stock-based compensation 1,570 1,800

Gain on asset divestiture ( 491 ) —

Gain on asset divestitures ( 44 ) ( 2,741 )

Change in operating assets and liabilities:

10 unchanged sentences

Other long-term liabilities ( 1,816 ) ( 1,780 )

Net cash (used in) provided by continuing operating activities ( 13,382 ) 6,842

Net cash used in continuing operating activities ( 18,836 ) ( 6,810 )

Net cash used in discontinued operating activities — ( 253 )

2 unchanged sentences

Capital expenditures on property, plant, and equipment ( 4,559 ) ( 3,568 )

Proceeds from asset divestiture 1,195 —

Acquisition, net of cash acquired ( 5,712 ) —

Net cash used in continuing investing activities ( 7,328 ) ( 2,248 )

Proceeds from asset divestitures 8,800 22,707

Acquisitions, net of cash acquired ( 58,561 ) ( 229 )

Net cash (used in) provided by continuing investing activities ( 54,061 ) 18,910

CASH FLOWS FROM FINANCING ACTIVITIES:

1 unchanged sentence

Proceeds from debt 197,926 134,705

Debt issuance costs ( 182 ) ( 358 )

Treasury stock acquisitions ( 405 ) ( 549 )

7 unchanged sentences

Interest paid $ 1,337 $ 2,205

Income taxes paid $ 389 $ 898

Income taxes (received) paid $ ( 5,151 ) $ 1,215

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

2 unchanged sentences

(Dollars in thousands)

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Stock Paid-in

4 unchanged sentences

Interest Total Stockholders’

Balance, March 31, 2022 $ 111 $ 42,153 $ 167,167 $ ( 9,200 ) $ ( 19,117 ) $ 583 $ 181,697

Net income — — 2,010 — — ( 34 ) 1,976

Balance, June 30, 2022 $ 111 $ 42,201 $ 169,177 $ ( 8,391 ) $ ( 22,547 ) $ 488 $ 181,039

Net loss — — ( 2,077 ) — — ( 28 ) ( 2,105 )

Other comprehensive loss, net of tax:

5 unchanged sentences

Stock-based compensation — 387 — — — — 387

Balance, June 30, 2022 $ 111 $ 42,201 $ 169,177 $ ( 8,391 ) $ ( 22,547 ) $ 488 $ 181,039

Three Months Ended June 30, 2021

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

Three Months Ended September 30, 2021

Stock Paid-in

4 unchanged sentences

Interest Total Stockholders’

Balance, March 31, 2021 $ 111 $ 43,943 $ 163,849 $ ( 11,783 ) $ ( 19,588 ) $ 354 $ 176,886

Net income — — 2,876 — — ( 22 ) 2,854

Other comprehensive income, net of tax:

Balance, June 30, 2021 $ 111 $ 43,650 $ 166,725 $ ( 11,104 ) $ ( 18,873 ) $ 383 $ 180,892

Net income (loss) — — 2,342 — — ( 30 ) 2,312

Other comprehensive loss, net of tax:

Pension liability adjustment — — — — 92 — 92

Foreign currency translation adjustment — — — — ( 1,579 ) ( 31 ) ( 1,610 )

Unrealized derivative loss on cash flow hedges — — — — ( 33 ) — ( 33 )

Cash flow hedges reclassified to earnings — — — — 136 — 136

2 unchanged sentences

Stock-based compensation — 587 — — — — 587

Balance, June 30, 2021 $ 111 $ 43,650 $ 166,725 $ ( 11,104 ) $ ( 18,873 ) $ 383 $ 180,892

Balance, September 30, 2021 $ 111 $ 44,048 $ 169,067 $ ( 10,917 ) $ ( 20,257 ) $ 322 $ 182,374

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

FOSTER COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)

(Dollars in thousands)

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Stock Paid-in

5 unchanged sentences

Balance, December 31, 2021 $ 111 $ 43,272 $ 168,733 $ ( 10,179 ) $ ( 18,845 ) $ 518 $ 183,610

Net income — — 444 — — ( 54 ) 390

Net loss — — ( 1,633 ) — — ( 82 ) ( 1,715 )

Other comprehensive loss income, net of tax:

6 unchanged sentences

Stock-based compensation — 1,570 — — — — 1,570

Balance, June 30, 2022 $ 111 $ 42,201 $ 169,177 $ ( 8,391 ) $ ( 22,547 ) $ 488 $ 181,039

Six Months Ended June 30, 2021

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.

FOSTER COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)

(Dollars in thousands)

Nine Months Ended September 30, 2021

Stock Paid-in

5 unchanged sentences

Balance, December 31, 2020 $ 111 $ 44,583 $ 165,107 $ ( 12,703 ) $ ( 20,268 ) $ — $ 176,830

Net income — — 1,618 — — ( 34 ) 1,584

Other comprehensive income (loss), net of tax:

Net income (loss) — — 3,960 — — ( 64 ) 3,896

Other comprehensive income, net of tax:

Pension liability adjustment — — — — 274 — 274

Foreign currency translation adjustment — — — — ( 639 ) ( 10 ) ( 649 )

Unrealized derivative loss on cash flow hedges — — — — ( 33 ) — ( 33 )

Cash flow hedges reclassified to earnings — — — — 409 — 409

3 unchanged sentences

Investment of noncontrolling interest — — — — — 396 396

Balance, June 30, 2021 $ 111 $ 43,650 $ 166,725 $ ( 11,104 ) $ ( 18,873 ) $ 383 $ 180,892

Balance, September 30, 2021 $ 111 $ 44,048 $ 169,067 $ ( 10,917 ) $ ( 20,257 ) $ 322 $ 182,374

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

7 unchanged sentences

In the opinion of management, all estimates and adjustments (consisting of normal recurring accruals, unless otherwise stated herein) considered necessary for a fair presentation of the financial position and Condensed Consolidated Statements of Cash Flows of L.B.

Foster Company and subsidiaries as of June 30, 2022 and December 31, 2021 and its Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Comprehensive (Loss) Income, and Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021 have been included.

Foster Company and subsidiaries as of September 30, 2022 and December 31, 2021 and its Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Comprehensive (Loss) Income, and Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021 have been included.

However, actual results could differ from those estimates and changes in those estimates are recorded when known.

6 unchanged sentences

Reclassifications

Certain accounts in the prior year consolidated financial statements have been reclassified for comparative purposes principally to conform to the presentation of the current year period.

Certain accounts in the prior year consolidated financial statements have been reclassified for comparative purposes principally to conform to the presentation of reporting segments in the current year period.

Effective for the quarter and year ended December 31, 2021, the Company implemented operational changes in how its Chief Operating Decision Maker (“CODM”) manages its businesses, including resource allocation and operating decisions.

9 unchanged sentences

The amendments are effective for all entities as of March 12, 2020 through December 31, 2022.

The Company is currently evaluating the impacts of the provisions of ASU 2020-04 on its financial condition, results of operations, and cash flows.

The Company does not expect the provisions of ASU 2020-04 to have a significant impact on its financial condition, results of operations, or cash flows.

Business Segments

8 unchanged sentences

Three Months Ended

June 30, 2022 Three Months Ended

June 30, 2021

Net Sales Segment Operating Profit (Loss) Net Sales Segment Operating Profit

September 30, 2022 Three Months Ended

September 30, 2021

Net Sales Segment Operating Profit Net Sales Segment Operating Profit (Loss)

Rail, Technologies, and Services $ 77,350 $ 539 $ 73,942 $ 3,091

2 unchanged sentences

Total $ 130,015 $ 2,087 $ 130,053 $ 3,208

Six Months Ended

June 30, 2022 Six Months Ended

June 30, 2021

Nine Months Ended

September 30, 2022 Nine Months Ended

September 30, 2021

Net Sales Segment Operating Profit (Loss) Net Sales Segment Operating Profit (Loss)

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

1 unchanged sentence

Interest expense - net ( 993 ) ( 722 ) ( 1,747 ) ( 2,454 )

Other income (expense) - net 701 ( 70 ) 1,264 ( 129 )

Other (expense) income - net ( 168 ) 2,880 1,096 2,751

Unallocated corporate expenses and other unallocated charges ( 3,207 ) ( 2,450 ) ( 5,749 ) ( 6,984 )

Income before income taxes $ 2,797 $ 3,993 $ 703 $ 2,402

(Loss) income from continuing operations before income taxes $ ( 2,281 ) $ 2,916 $ ( 1,578 ) $ 5,318

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

September 30,

2022 December 31,

4 unchanged sentences

Total $ 413,192 $ 342,595

Revenue from products or services provided to customers over time accounted for 27.5 % and 27.9 % of revenue for the three months ended June 30, 2022 and 2021, respectively, and 28.8 % and 26.8 % of revenue for the six months ended June 30, 2022 and 2021, respectively.

Acquisitions and Divestitures

Skratch Enterprises Ltd.

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 five years or utilized to satisfy post-closing working capital adjustments or indemnity claims under the purchase agreement.

Located in Telford, United Kingdom, Skratch offers a single-point supply solution model for clients, and enabling large scale deployments.

Skratch’s service offerings include design, prototyping and proof of concept, hardware and software, logistics and warehousing, installation, maintenance, content management, and managed monitoring.

Skratch has been included in the Company’s Technology Services and Solutions business unit within the Rail, Technologies, and Services segment.

VanHooseCo Precast LLC

On August 12, 2022, the Company acquired the operating assets of VanHooseCo Precast LLC (“VanHooseCo”), a privately-held business headquartered in Loudon, Tennessee specializing in precast concrete walls, water management products, and traditional precast products for the industrial, commercial, and residential infrastructure markets.

The Company acquired VanHooseCo for $ 52,203 , net of cash acquired at closing, subject to the finalization of net working capital adjustments.

An amount equal to $ 2,500 of the purchase price was deposited in an escrow account in order to cover breaches of representations and warranties.

The acquisition agreement includes two employment agreements whereby principals have the ability to earn up to an additional $ 1,000 dependent upon the successful completion of the principals’ employment agreements.

VanHooseCo has been included in the Company’s Precast Concrete Products segment.

Acquisition Summary

Each transaction was accounted for under the acquisition method of accounting under U.S.

GAAP which requires an acquiring entity to recognize, with limited exceptions, all of the assets acquired and liabilities assumed in a transaction at fair value as of the acquisition date.

Goodwill primarily represents the value paid for each acquisition’s enhancement to the Company’s product and service offerings and capabilities, as well as a premium payment related to the ability to control the acquired assets, as well as the assembled workforce provided.

VanHooseCo contributed net sales of $ 6,353 and operating profit of $ 397 to the Company’s consolidated results for the period from August 12, 2022 through September 30, 2022.

The table below summarizes the Company’s results as though the VanHooseCo acquisition had been completed on January 1, 2022.

Certain of VanHooseCo’s historical amounts were reclassified to conform to the Company’s financial presentation of operations, which included recording inventory and property, plant, and equipment at fair market value, to establish intangible assets, to remove deferred compensation expense, and to include interest expense for the additional borrowings.

The following unaudited pro forma information is provided for informational purposes only and does not represent what consolidated results of operations would have been had the VanHooseCo acquisition occurred on January 1, 2022 nor are they necessarily indicative of future consolidated results of operations.

The Company has omitted the prior year interim period from the table below due to the acquired company being a privately-held entity with limited interim financial information.

Nine Months Ended

September 30,

Net sales $ 385,824

Net loss attributable to L.B.

Foster Company ( 633 )

Diluted loss per share

As reported $ ( 0.16 )

Pro forma $ ( 0.06 )

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of the VanHooseCo and Skratch acquisitions.

Due to the timing of the acquisitions, the Company is in the process of measuring the fair value of assets acquired and liabilities assumed, including intangible assets, and values for the allocations shown in the tables below are preliminary.

Allocation of purchase price VanHooseCo Skratch

Current assets, net of cash acquired on the acquisition date $ 10,825 $ 1,129

Property, plant, and equipment 30,001 174

Goodwill 9,674 5,549

Other intangibles 4,561 1,750

Liabilities assumed ( 2,521 ) ( 1,200 )

Total $ 52,540 $ 7,402

The following table summarizes the estimates of the fair values of the VanHooseCo and Skratch identifiable intangible assets acquired:

Identifiable intangible assets VanHooseCo Skratch

Non-compete agreements $ — 27

Customer relationships 1,537 1,349

Trademarks and trade names 2,697 374

Favorable lease 327 —

Total $ 4,561 $ 1,750

The Company made a preliminary allocation of the purchase price for the VanHooseCo and Skratch acquisitions as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities.

These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy.

See Note 14 for a description of the fair value hierarchy.

Due to the timing of the acquisitions, values shown in the table above are preliminary.

If new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement recognized for assets or liabilities assumed, the Company will retrospectively adjust the amounts recognized as of the acquisition date.

Divestiture Summary

On August 1, 2022, the Company divested the assets of its rail spikes and anchors track components business (“Track Components”) located in St-Jean-sur-Richelieu, Quebec, Canada.

Cash proceeds from the transaction were $ 7,795 , subject to indemnification obligations and working capital adjustments.

The Track Components business was reported in the Rail Products business unit within the Rail, Technologies, and Services segment.

On September 24, 2021, the Company executed the sale of its Piling Products division for $ 23,902 in total proceeds.

The sale included substantially all inventory held by the Company associated with the division.

The Piling Products division was included in the Fabricated Steel business unit within the Steel Products and Measurement segment.

Revenue from products or services provided to customers over time accounted for 23.8 % and 35.8 % of revenue for the three months ended September 30, 2022 and 2021, respectively, and 27.0 % and 29.7 % of revenue for the nine months ended September 30, 2022 and 2021, respectively.

The majority of revenue under these long-term agreements is recognized over time either 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 upon which measure the Company believes best depicts its performance to date under the terms of the contract.

Revenue recognized over time using an input measure was $ 20,089 and $ 27,687 for the three months ended June 30, 2022 and 2021, respectively, and $ 39,411 and $ 48,795 for the six months ended June 30, 2022 and 2021, respectively.

Revenue recognized over time using an input measure was $ 14,380 and $ 30,314 for the three months ended September 30, 2022 and 2021, respectively, and $ 53,791 and $ 79,109 for the nine months ended September 30, 2022 and 2021, respectively.

A certain portion of the Company’s revenue recognized over time under these long-term agreements is recognized using an output method, specifically units delivered, based upon certain customer acceptance and delivery requirements.

Revenue recognized over

time using an output measure was $ 16,013 and $ 15,487 for the three months ended June 30, 2022 and 2021, respectively, and $ 26,994 and $ 23,751 for the six months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022 and December 31, 2021, the Company had contract assets of $ 31,023 and $ 36,179 , respectively, that were recorded within the Condensed Consolidated Balance Sheets.

As of June 30, 2022 and December 31, 2021, the Company had contract liabilities of $ 2,584 and $ 3,235 , respectively, that were recorded in “Deferred revenue” within the Condensed Consolidated Balance Sheets.

Revenue recognized over time using an output measure was $ 16,520 and $ 16,262 for the three months ended September 30, 2022 and 2021, respectively, and $ 43,514 and $ 40,013 for the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022 and December 31, 2021, the Company had contract assets of $ 31,963 and $ 36,179 , respectively, that were recorded within the Condensed Consolidated Balance Sheets.

As of September 30, 2022 and December 31, 2021, the Company had contract liabilities of $ 4,606 and $ 3,235 , respectively, that were recorded in “Deferred revenue” within the Condensed Consolidated Balance Sheets.

The majority of the Company’s revenue is from products transferred and services rendered to customers at a point in time.

Point in time revenue accounted for 72.5 % and 72.1 % of revenue for the three months ended June 30, 2022 and 2021, respectively, and 71.2 % and 73.2 % for six months ended June 30, 2022 .

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.

Point in time revenue accounted for 76.2 % and 64.2 % of revenue for the three months ended September 30, 2022 and 2021, respectively, and 73.0 % and 70.3 % for nine months ended September 30, 2022 and 2021.

The Company recognizes revenue at the point in time at which the customer obtains control of the product or service is performed, 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 physical location.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

10 unchanged sentences

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

Three Months Ended June 30, 2022

Rail, Technologies,

and Services Precast Concrete Products Steel Products and Measurement Total

Three Months Ended September 30, 2022

Rail, Technologies, and Services Precast Concrete Products Steel Products and Measurement Total

Point in time $ 64,913 $ 13,331 $ 20,871 $ 99,115

1 unchanged sentence

Total net sales $ 77,350 $ 28,856 $ 23,809 $ 130,015

Three Months Ended June 30, 2021

Rail, Technologies,

and Services Precast Concrete Products Steel Products and Measurement Total

Three Months Ended September 30, 2021

Rail, Technologies, and Services Precast Concrete Products Steel Products and Measurement Total

Point in time $ 54,470 $ 4,088 $ 24,919 $ 83,477

1 unchanged sentence

Total net sales $ 73,942 $ 17,972 $ 38,139 $ 130,053

Six Months Ended June 30, 2022

Rail, Technologies,

and Services Precast Concrete Products Steel Products and Measurement Total

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

1 unchanged sentence

Total net sales $ 222,857 $ 67,477 $ 69,990 $ 360,324

Six Months Ended June 30, 2021

Rail, Technologies,

and Services Precast Concrete Products Steel Products and Measurement Total

Nine Months Ended September 30, 2021

Rail, Technologies, and Services Precast Concrete Products Steel Products and Measurement Total

Point in time $ 178,225 $ 10,209 $ 93,099 $ 281,533

2 unchanged sentences

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

Significant changes in contract assets during the six months ended June 30, 2022 included transfers of $ 14,235 from the contract assets balance as of December 31, 2021 to accounts receivable.

Significant changes in contract liabilities during the six months ended June 30, 2022 resulted from increases of $ 2,570 due to billings in excess of costs, excluding amounts recognized as revenue during the period.

Contract liabilities were reduced due to revenue recognized during the three months ended June 30, 2022 and 2021 of $ 1,201 and $ 228 , respectively, and revenue recognized during the six months ended June 30, 2022 and 2021 of $ 2,642 and $ 904 , respectively, which were included in contract liabilities at the beginning of each period.

Significant changes in contract assets during the nine months ended September 30, 2022 included transfers of $ 14,293 from the contract assets balance as of December 31, 2021 to accounts receivable.

Significant changes in contract liabilities during the nine months ended September 30, 2022 resulted from increases of $ 3,087 due to billings in excess of costs, excluding amounts recognized as revenue during the period.

Contract liabilities were reduced due to revenue recognized during the three months ended September

30, 2022 and 2021 of $ 14 and $ 81 , respectively, and revenue recognized during the nine months ended September 30, 2022 and 2021 of $ 2,656 and $ 985 , respectively, which were included in contract liabilities at the beginning of each period.

The Company records provisions related to the allowance for credit losses associated with contract assets.

2 unchanged sentences

These expectations are formed based on trends observed, as well as current and expected future conditions.

As of June 30, 2022, the Company had approximately $ 250,845 of obligations under new contracts and remaining performance obligations, which is also referred to as backlog.

Approximately 5.3 % of the June 30, 2022 backlog was related to projects that are anticipated to extend beyond June 30, 2023.

As of September 30, 2022, the Company had approximately $ 272,777 of obligations under new contracts and remaining performance obligations, which is also referred to as backlog.

Approximately 10.1 % of the September 30, 2022 backlog was related to projects that are anticipated to extend beyond September 30, 2023.

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, 2021 $ 14,577 $ 2,564 $ 3,011 $ 20,152

Skratch acquisition 5,549 — — 5,549

VanHooseCo acquisition — 9,674 — 9,674

Foreign currency translation impact ( 1,945 ) — — ( 1,945 )

Balance as of June 30, 2022 $ 18,996 $ 2,564 $ 3,011 $ 24,571

Balance as of September 30, 2022 $ 18,181 $ 12,238 $ 3,011 $ 33,430

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 COVID-19.

However, the future impacts of COVID-19 are unpredictable and are subject to change.

No interim goodwill impairment test was required as a result of the evaluation of qualitative factors as of June 30, 2022.

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 five years or utilized to satisfy post closing working capital adjustments or indemnity claims under the purchase agreement.

Located in Telford, United Kingdom, Skratch offers a single-point supply solution model for clients, and enabling large scale deployments.

Skratch has been included in the Company’s Technology Services and Solutions business unit within the Rail,

Technologies, and Services segment.

The following table summarizes the estimates of the fair value of the goodwill and identified intangible assets acquired as of June 30, 2022:

Goodwill $ 5,343

Non-compete agreements 27

Customer relationships 1,335

Trademarks and trade names 370

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 COVID-19 and current economic conditions, including but not limited to labor markets, supply chains, and other inflationary costs.

However, the future impacts of COVID-19 and market conditions are unpredictable and are subject to change.

No interim goodwill impairment test was required as a result of the evaluation of qualitative factors as of September 30, 2022.

The components of the Company’s intangible assets were as follows for the periods presented:

June 30, 2022

September 30, 2022

Weighted Average

7 unchanged sentences

Technology 14 34,855 ( 27,202 ) 7,653

Favorable lease 6 327 ( 9 ) 318

$ 78,015 $ ( 48,820 ) $ 29,195

9 unchanged sentences

$ 80,121 $ ( 49,098 ) $ 31,023

The Company amortizes intangible assets over their useful lives, which range from 1 to 25 years, with a total weighted average amortization period of approximately 16 years as of June 30, 2022.

Amortization expense was $ 1,419 and $ 1,470 for the three months ended June 30, 2022 and 2021, respectively, and was $ 2,855 and $ 2,935 for the six months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022, estimated amortization expense for the remainder of 2022 and thereafter was as follows:

The Company amortizes intangible assets over their useful lives, which range from 1 to 25 years, with a total weighted average amortization period of approximately 15 years as of September 30, 2022.

Amortization expense was $ 1,599 and $ 1,462 for the three months ended September 30, 2022 and 2021, respectively, and was $ 4,454 and $ 4,397 for the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, the Company’s gross carrying value of customer relationships and technology intangible assets were reduced by $ 5,448 and $ 471 , respectively, and the net carrying amount of customer relationships and technology intangible assets were reduced by $ 2,869 and $ 7 , respectively, as a result of the August 1, 2022 disposition of the Track Components business.

As of September 30, 2022, estimated amortization expense for the remainder of 2022 and thereafter was as follows:

Amortization Expense

4 unchanged sentences

Credit terms are consistent with industry standards and practices.

The amounts of trade accounts receivable as of June 30, 2022 and December 31, 2021 have been reduced by an allowance for credit losses of $ 515 and $ 547 , respectively.

Changes in reserves for uncollectible accounts, which are recorded as part of “Selling and administrative expenses” within the Condensed Consolidated Statements of Operations, resulted in expense of $ 150 and $ 40 for the three months ended June 30, 2022 and 2021, respectively, and expense of $ 211 and $ 18 for the six months ended June 30, 2022 and 2021, respectively.

The amounts of trade accounts receivable as of September 30, 2022 and December 31, 2021 have been reduced by an allowance for credit losses of $ 515 and $ 547 , respectively.

Changes in reserves for uncollectible accounts, which are recorded as part of “Selling and administrative expenses” within the Condensed Consolidated Statements of Operations, resulted in income of $ 40 and $ 145 for the three months ended September 30, 2022 and 2021, respectively, and expense of $ 171 and income of $ 127 for the nine months ended September 30, 2022 and 2021, respectively.

The Company established the allowance for credit losses by calculating the amount to reserve based on the age of a given trade receivable and considering historical collection patterns and bad debt expense experience, in addition to any other relevant subjective adjustments to individual receivables made by management.

8 unchanged sentences

Write-off against allowance ( 203 )

Balance as of June 30, 2022 $ 515

Inventories as of June 30, 2022 and December 31, 2021 are summarized in the following table:

Balance as of September 30, 2022 $ 515

Inventories as of September 30, 2022 and December 31, 2021 are summarized in the following table:

September 30,

2022 December 31,

5 unchanged sentences

Property, Plant, and Equipment

Property, plant, and equipment as of June 30, 2022 and December 31, 2021 consisted of the following:

Property, plant, and equipment as of September 30, 2022 and December 31, 2021 consisted of the following:

September 30,

2022 December 31,

7 unchanged sentences

Property, plant, and equipment - net $ 83,957 $ 58,222

Depreciation expense was $ 1,876 and $ 2,018 for the three months ended June 30, 2022 and 2021, respectively, and $ 3,814 and $ 4,008 for the six months ended June 30, 2022 and 2021, respectively.

Depreciation expense was $ 2,269 and $ 2,041 for the three months ended September 30, 2022 and 2021, respectively, and $ 6,083 and $ 6,049 for the nine months ended September 30, 2022 and 2021, respectively.

The Company reviews its property, plant, and equipment for recoverability whenever events or changes in circumstances indicate that carrying amounts may not be recoverable.

The Company recognizes an impairment loss if it believes that the carrying amount of a long-lived asset is not recoverable and exceeds its fair value.

There were no impairments of property, plant, and equipment during the six months ended June 30, 2022 and 2021.

There were no impairments of property, plant, and equipment during the nine months ended September 30, 2022 and 2021.

The Company determines if an arrangement is a lease at its inception.

Operating leases are included in “Operating lease right-of-use assets - net,” “Other accrued liabilities,” and “Long-term operating lease liabilities” within the Condensed Consolidated Balance

Finance leases are included within “Property, plant, and equipment - net,” “Current maturities of long-term debt,” and “Long-term debt” within the Condensed Consolidated Balance Sheets.

The Company has operating and finance leases for manufacturing facilities, corporate offices, sales offices, vehicles, and certain equipment.

As of June 30, 2022, the Company’s leases had remaining lease terms of 2 to 12 years, some of which include options to extend the leases for up to 12 years, and some of which include options to terminate the leases within 1 year.

The balance sheet components of the Company’s leases were as follows as of June 30, 2022 and December 31, 2021:

As of September 30, 2022, the Company’s leases had remaining lease terms of 2 to 12 years, some of which include options to extend the leases for up to 12 years, and some of which include options to terminate the leases within 1 year.

The balance sheet components of the Company’s leases were as follows as of September 30, 2022 and December 31, 2021:

September 30,

2022 December 31,

11 unchanged sentences

Total finance lease liabilities $ 156 $ 151

The components of lease expense within the Company’s Condensed Consolidated Statements of Operations were as follows for the six months ended June 30, 2022 and 2021:

The components of lease expense within the Company’s Condensed Consolidated Statements of Operations were as follows for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

5 unchanged sentences

Total lease cost $ 707 $ 725 $ 2,177 $ 2,105

The cash flow components of the Company’s leases were as follows for the six months ended June 30, 2022 and 2021:

Six Months Ended

The cash flow components of the Company’s leases were as follows for the nine months ended September 30, 2022 and 2021:

Nine Months Ended

September 30,

Cash paid for amounts included in the measurement of lease liabilities:

4 unchanged sentences

The weighted-average remaining lease term (in years) and discount rate related to the operating leases were as follows as of the dates presented:

September 30,

Operating lease weighted-average remaining lease term 5 7

2 unchanged sentences

Finance lease weighted-average discount rate 4 % 4.2 %

As of June 30, 2022, estimated annual maturities of lease liabilities remaining for the year ending December 31, 2022 and thereafter were as follows:

As of September 30, 2022, estimated annual maturities of lease liabilities remaining for the year ending December 31, 2022 and thereafter were as follows:

Operating Leases Finance Leases

2 unchanged sentences

2024 2,900 41

2025 2,351 20

2027 and thereafter 3,092 —

4 unchanged sentences

Long-term debt consisted of the following:

September 30,

2022 December 31,

24 unchanged sentences

Other restrictions exist at all times including, but not limited to, limitations on the Company’s sale of assets and the incurrence by either the Borrowers or the non-borrower subsidiaries of the Company of other indebtedness, guarantees, and liens.

As of June 30, 2022, the Company was in compliance with the covenants in the Credit Agreement, as amended.

As of June 30, 2022, the Company had outstanding letters of credit of approximately $ 683 and had net available borrowing capacity of $ 81,489 , subject to covenant restrictions.

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 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.

As of September 30, 2022, the Company was in compliance with the covenants in the Credit Agreement, as amended.

As of September 30, 2022, the Company had outstanding letters of credit of approximately $ 564 and had net available borrowing capacity of $ 30,673 , subject to covenant restrictions.

The maturity date of the facility is August 13, 2026.

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Numerator for basic and diluted loss per common share:

Net income $ 1,976 $ 2,854 $ 390 $ 1,584

Numerator for basic and diluted (loss) earnings per common share:

Net (loss) income from continuing operations $ ( 2,105 ) $ 2,240 $ ( 1,715 ) $ 3,824

Income from discontinued operations — 72 — 72

Net (loss) income $ ( 2,105 ) $ 2,312 $ ( 1,715 ) $ 3,896

Weighted average shares outstanding 10,731 10,642 10,710 10,615

1 unchanged sentence

Effect of dilutive securities:

Stock compensation plans — 122 — 129

Dilutive potential common shares — 122 — 129

Denominator for diluted income (loss) per common share - adjusted weighted average shares outstanding 10,814 10,734 10,809 10,729

Basic earnings per common share $ 0.18 $ 0.27 $ 0.04 $ 0.15

Diluted earnings per common share $ 0.18 $ 0.27 $ 0.04 $ 0.15

For the three months ended June 30, 2022 and 2021, the Company recorded an income tax expense of $ 821 and $ 1,139 on pre-tax income of $ 2,797 and $ 3,993 for an effective income tax rate of 29.4 % and 28.5 %, respectively.

For the six months ended June 30, 2022 and 2021, the Company recorded an income tax expense of $ 313 and $ 818 on pre-tax income of $ 703 and $ 2,402 for an effective income tax rate of 44.5 % and 34.1 %, respectively.

The Company’s effective tax rate for the three and six months ended June 30, 2022 and 2021 differs from the federal statutory rate of 21% primarily due to state income taxes, nondeductible expenses, and research tax credits.

Denominator for diluted (loss) income per common share - adjusted weighted average shares outstanding 10,731 10,764 10,710 10,744

Continuing operations $ ( 0.20 ) $ 0.21 $ ( 0.16 ) $ 0.36

Discontinued operations — 0.01 — 0.01

Basic (loss) earnings per common share $ ( 0.20 ) $ 0.22 $ ( 0.16 ) $ 0.37

Continuing operations $ ( 0.20 ) $ 0.21 $ ( 0.16 ) $ 0.36

Discontinued operations — 0.01 — 0.01

Diluted (loss) earnings per common share $ ( 0.20 ) $ 0.22 $ ( 0.16 ) $ 0.37

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

For the three months ended September 30, 2022 and 2021, the Company recorded an income tax benefit of $ 176 and expense of $ 676 , respectively, on pre-tax losses of $ 2,281 and pre-tax income of $ 2,916 , respectively, for an effective income tax rate of 7.7 % and 23.2 %, respectively.

For the nine months ended September 30, 2022 and 2021, the Company recorded an income tax expense of $ 137 and $ 1,494 , respectively, on pre-tax losses of $ 1,578 and pre-tax income of $ 5,318 , respectively, for an effective income tax rate of 8.7 % and 28.1 %, respectively.

The Company's provision for income taxes for the three- and nine-month periods ended September 30, 2022 included a discrete income tax expense of $ 330 for a change in our permanent reinvestment assertion with respect to the undistributed earnings in Canada, as a result of the divestiture of our Track Components business located in St-Jean-sur-Richelieu, Quebec, Canada.

In addition to the impact of the discrete items, the Company’s effective tax rate for the three and nine months ended September 30, 2022 and 2021 differs from the federal statutory rate of 21% primarily due to state income taxes, nondeductible expenses, research tax credits and withholding taxes on excess cash available for repatriation from foreign affiliates.

Changes in pre-tax income projections, combined with the seasonal nature of our businesses, could also impact the effective income tax rate.

2 unchanged sentences

Stock-based compensation cost is measured at the grant date based on the calculated fair value of the award and is recognized over the employees’ requisite service periods.

recorded stock-based compensation expense related to restricted stock awards and performance share units of $ 925 and $ 386 for the three months ended June 30, 2022 and 2021, respectively, and $ 1,183 and $ 1,213 for the six months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022, unrecognized compensation expense for unvested awards approximated $ 4,104 .

The Company recorded stock-based compensation expense related to restricted stock awards and performance share units of $ 387 and $ 587 for the three months ended September 30, 2022 and 2021, respectively, and $ 1,570 and $ 1,800 for the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, unrecognized compensation expense for unvested awards approximated $ 3,254 .

The Company expects to recognize this expense over the upcoming 3.4 years through March 2026.

1 unchanged sentence

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

Under the 2006 Omnibus Plan, the Company grants eligible employees restricted stock and performance share units.

Under the 2022 Equity and Incentive Compensation Plan, predecessor 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.

9 unchanged sentences

On June 2, 2022, the shareholders approved the new 2022 Equity and Incentive Compensation plan as the successor to the 2006 Omnibus Plan and contingent Strategic Transformation Plan.

The following table summarizes the restricted stock awards, deferred stock units, and performance share units activity for the six months ended June 30, 2022:

The following table summarizes the restricted stock awards, deferred stock units, and performance share units activity for the nine months ended September 30, 2022:

Stock Deferred

7 unchanged sentences

Cancelled and forfeited ( 500 ) — — 18.57

Outstanding as of June 30, 2022 186,234 80,680 147,319 $ 17.54

Outstanding as of September 30, 2022 185,633 80,680 108,478 $ 17.70

Fair Value Measurements

10 unchanged sentences

The carrying amounts approximate fair value because of the short maturity of the instruments.

LIBOR-based interest rate swaps - To reduce the impact of interest rate changes on outstanding variable-rate debt, the Company entered into a forward starting LIBOR-based interest rate swaps with notional values totaling $ 50,000 and $ 20,000 effective February 2017 and March 2022, respectively.

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 June 30, 2022 and December 31, 2021, 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.

As of September 30, 2022 and December 31, 2021, 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,

2022 Quoted Prices in Active Markets for Identical Assets

10 unchanged sentences

Total liabilities $ — $ — $ — $ — $ 159 $ — $ 159 $ —

The $ 20,000 interest rate swaps that became effective March 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 $ 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 Balance Sheets and included in “Interest expense - net” in our Condensed Consolidated Statements of Operations as the interest expense from our debt is recognized.

The Company accounted for the $ 50,000 of interest rate swaps that became effective February 2017 as cash flow hedges, these interest rate swaps expired February 2022.

For the three months ended June 30, 2022 and 2021, the Company recognized interest income of $ 19 and interest expense of $ 245 , respectively, from interest rate swaps.

For the six months ended June 30, 2022 and 2021, the Company recognized interest expense of $ 78 and $ 480 , respectively, from interest rate swaps.

The Company accounted for the $ 50,000 of interest rate swaps that became effective February 2017 as cash flow hedges.

In the third quarter of 2020, the Company dedesignated the cash flow hedges and accounted for the $ 50,000 interest rate swaps on a mark-to-market basis with changes in fair value recorded in current period earnings.

In connection with this dedesignation, the Company froze the balances recorded in “Accumulated other comprehensive loss” at June 30, 2020 and reclassifies balances to earnings as the underlying physical transactions occur, unless it is no longer probable that the physical transaction will occur at which time the related gains deferred in Other Comprehensive Income will be immediately recorded in earnings.

The gains and losses related to the interest rate swaps are reclassified from “Accumulated other comprehensive loss” in the Condensed Consolidated Balance Sheets and included in “Interest expense - net” in the Condensed Consolidated Statements of Operations as the interest expense from the Company’s debt is recognized.

These interest rate swaps expired February 2022.

For the three months ended September 30, 2021, the Company recognized interest expense of $ 244 from interest rate swaps.

For the nine months ended September 30, 2022 and 2021, the Company recognized interest expense of $ 78 and $ 724 , respectively, from interest rate swaps.

In accordance with the provisions of ASC Topic 820, “Fair Value Measurement,” the Company measures certain nonfinancial assets and liabilities at fair value, which are recognized and disclosed on a nonrecurring basis.

6 unchanged sentences

The Company’s policy is to contribute at least the minimum in accordance with the funding standards of ERISA.

The Company maintains two defined contribution plans for its employees in Canada, as well as one post-retirement benefit plan.

The Company maintains one defined contribution plan for its employees in Canada.

The Company also maintains two defined contribution plans and one defined benefit plan for its employees in the United Kingdom.

United States Defined Benefit Plan

Net periodic pension costs for the United States defined benefit pension plan for the three and six months ended June 30, 2022 and 2021 were as follows:

Net periodic pension costs for the United States defined benefit pension plan for the three and nine months ended September 30, 2022 and 2021 were as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

3 unchanged sentences

Net periodic pension cost $ 1 $ 6 $ 1 $ 18

The Company has made contributions to its United States defined benefit pension plan of $ 230 during the six months ended June 30, 2022 and expects to make total contributions of $ 460 during 2022.

The Company has made contributions to its United States defined benefit pension plan of $ 345 during the nine months ended September 30, 2022 and expects to make total contributions of $ 460 during 2022.

United Kingdom Defined Benefit Plan

Net periodic pension costs for the United Kingdom defined benefit pension plan for the three and six months ended June 30, 2022 and 2021 were as follows:

Net periodic pension costs for the United Kingdom defined benefit pension plan for the three and nine months ended September 30, 2022 and 2021 were as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

5 unchanged sentences

United Kingdom regulations require trustees to adopt a prudent approach to funding required contributions to defined benefit pension plans.

For the six months ended June 30, 2022, the Company contributed approximately $ 156 to the plan.

For the nine months ended September 30, 2022, the Company contributed approximately $ 226 to the plan.

The Company anticipates total contributions of approximately $ 302 to the United Kingdom pension plan during 2022.

Defined Contribution Plans

The Company sponsors six defined contribution plans for hourly and salaried employees across its domestic and international facilities.

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

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

13 unchanged sentences

Warranty liability utilized ( 366 )

Balance as of June 30, 2022 $ 785

Balance as of September 30, 2022 $ 756

Union Pacific Railroad (“UPRR”) Concrete Tie Matter

25 unchanged sentences

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 June 30, 2022 and December 31, 2021, the Company maintained environmental reserves approximating $ 2,500 and $ 2,519 , respectively.

As of September 30, 2022 and December 31, 2021, the Company maintained environmental reserves approximating $ 2,470 and $ 2,519 , respectively.

The following table sets forth the Company’s environmental obligation:

2 unchanged sentences

Environmental obligations utilized ( 49 )

Balance as of June 30, 2022 $ 2,500

Balance as of September 30, 2022 $ 2,470

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 June 30, 2022.

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 June 30, 2022, no such disclosures were considered necessary.

Subsequent Events

On August 1, 2022, the Company divested the assets of its rail spikes and anchors track components business (“Track Components”) located in St-Jean-sur-Richelieu, Quebec, Canada.

Cash proceeds from the transaction are expected to total $ 7,795 , subject to indemnification obligations and working capital adjustment.

The Track Components business was reported in the Rail Products business unit within the Rail, Technologies, and Services segment.

Based on the Company’s assessment as of September 30, 2022, no such disclosures were considered necessary.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements