What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-06 compared with 2023-03-10 · 249 added, 268 removed, 981 unchanged (35% of the section changed)

40 unchanged sentences

Description of the Matter At December 31, 2023, the Company had $32.6 million of goodwill on its consolidated balance sheet.

As more fully described in Notes 1 and 5 to the consolidated financial statements, during 2022, weakened economic conditions, unfavorable changes in foreign exchange rates, and recent increases in the cost of certain materials, labor, and other inflation-related pressures unfavorably impacted the financial results.

Because of these challenging market conditions, the Company was required to perform a quantitative test of goodwill for these reporting units.

Significant assumptions used in the Company’s fair value estimate included revenue growth, EBITDA contribution, and market participant assumptions.

As more fully described in Notes 1 and 5 to the consolidated financial statements, goodwill is tested for impairment annually as of October 1st, or more frequently, if an event occurs or circumstances change that would more likely than not reduce fair value below carrying value.

The Company performed a quantitative assessment on the goodwill at both the Rail Technologies and Precast Concrete Reporting units.

Significant assumptions used in the Company’s fair value estimate included revenue growth and EBITDA contribution.

Auditing the goodwill test was complex, as it included estimating the fair value of the reporting units.

In particular, the fair value estimates are sensitive to the significant assumptions named above, which are affected by expected future market or economic conditions.

In particular, the fair value estimates are subjective and sensitive to the significant assumptions.

How We Addressed the Matter in Our Audit

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Other intangibles - net (Note 5) 19,010 23,831

Deferred tax assets (Note 14) 24 37,242

Other assets 2,715 2,379

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Goodwill and long-lived assets impairment charges (Note 5) — 8,016

Operating (loss) income ( 7,206 ) 4,471

Operating income (loss) 10,138 ( 7,206 )

Interest expense - net 5,528 3,340

Other income - net (Note 19) ( 1,550 ) ( 3,075 )

(Loss) income before income taxes ( 8,996 ) 4,590

Income tax expense (Note 14) 36,681 1,119

Net (loss) income ( 45,677 ) 3,471

Other expense (income) - net (Note 19) 3,666 ( 1,550 )

Income (loss) before income taxes 944 ( 8,996 )

Income tax (benefit) expense (Note 14) ( 355 ) 36,681

Net income (loss) 1,299 ( 45,677 )

Net loss attributable to noncontrolling interest ( 165 ) ( 113 )

Net (loss) income attributable to L.B.

Foster Company ( 45,564 ) 3,554

Discontinued operations:

Income from discontinued operations before income taxes — 72

Income tax expense (Note 14) — —

Income from discontinued operations — 72

Net (loss) income attributable to L.B.

Net income (loss) attributable to L.B.

Foster Company $ 1,464 $ ( 45,564 )

Basic (loss) earnings per common share:

From continuing operations $ ( 4.25 ) $ 0.33

From discontinued operations — 0.01

Basic (loss) earnings per common share (Note 13) $ ( 4.25 ) $ 0.34

Diluted (loss) earnings per common share:

From continuing operations $ ( 4.25 ) $ 0.33

From discontinued operations — 0.01

Diluted (loss) earnings per common share (Note 13) $ ( 4.25 ) $ 0.34

Basic earnings (loss) per common share (Note 13) $ 0.14 $ ( 4.25 )

Diluted earnings (loss) per common share (Note 13) $ 0.13 $ ( 4.25 )

Basic weighted average shares outstanding 10,799 10,720

Diluted weighted average shares outstanding 10,995 10,720

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

FOSTER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

Year Ended December 31,

Net (loss) income from continuing operations $ ( 45,677 ) $ 3,471

Other comprehensive (loss) income, net of tax:

Net income (loss) $ 1,299 $ ( 45,677 )

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment 2,428 ( 5,639 )

Unrealized gain on cash flow hedges, net of tax expense of $ 0 and $ 44 , respectively

Cash flow hedges reclassified to earnings, net of tax expense of $ 0 and $ 235 , respectively

Unrealized (loss) gain on cash flow hedges, net of tax expense of $ 0

( 704 ) 1,755

Cash flow hedges reclassified to earnings, net of tax expense of $ 0

Pension and post-retirement benefit plans benefit, net of tax benefit of $ 0 and $ 357 , respectively

Reclassification of pension liability adjustments to earnings, net of tax expense of $ 0 and benefit of $ 6 , respectively*

Total comprehensive (loss) income from continuing operations ( 47,997 ) 4,876

Total comprehensive income (loss) 3,214 ( 47,997 )

Less comprehensive loss attributable to noncontrolling interest:

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Amounts attributable to noncontrolling interest ( 136 ) ( 98 )

Comprehensive (loss) income from continuing operations attributable to L.B.

Comprehensive income (loss) attributable to L.B.

Foster Company $ 3,350 $ ( 47,899 )

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CASH FLOWS FROM OPERATING ACTIVITIES:

(Loss) income from continuing operations $ ( 45,677 ) $ 3,471

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

Net income (loss) $ 1,299 $ ( 45,677 )

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

Deferred income taxes ( 1,852 ) 35,785

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Equity income in nonconsolidated investment ( 51 ) ( 74 )

(Gain) loss on sales and disposals of property, plant, and equipment ( 177 ) 51

Gain on sales and disposals of property, plant, and equipment ( 459 ) ( 177 )

Stock-based compensation 4,179 2,380

Loss (gain) on asset divestiture 214 ( 2,741 )

Loss on asset divestitures 3,074 214

Change in operating assets and liabilities:

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Other liabilities ( 1,537 ) 1,342

Net cash used in continuing operating activities ( 10,576 ) ( 810 )

Net cash used in discontinued operating activities — ( 253 )

Net cash provided by (used in) operating activities 37,376 ( 10,576 )

CASH FLOWS FROM INVESTING ACTIVITIES:

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Proceeds from asset divestiture 7,706 8,800

Capital contributions to nonconsolidated investment — ( 66 )

Net cash (used in) provided by continuing investing activities ( 56,418 ) 17,822

Net cash provided by (used in) investing activities 2,066 ( 56,418 )

CASH FLOWS FROM FINANCING ACTIVITIES:

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Treasury stock acquisitions ( 2,625 ) ( 410 )

Investment of noncontrolling interest — 969

Net cash provided by (used in) continuing financing activities 60,240 ( 13,904 )

Consideration received from noncontrolling interest 589 —

Net cash (used in) provided by financing activities ( 39,296 ) 60,240

Effect of exchange rate changes on cash and cash equivalents ( 468 ) ( 736 )

Net (decrease) increase in cash and cash equivalents ( 7,490 ) 2,808

Net decrease in cash and cash equivalents ( 322 ) ( 7,490 )

Cash and cash equivalents at beginning of period 2,882 10,372

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Supplemental disclosure of cash flow information:

Interest paid $ 2,701 $ 2,615

Income taxes (received) paid $ ( 5,007 ) $ 1,491

Net interest paid $ 5,454 $ 2,701

Net income taxes received $ ( 221 ) $ ( 5,007 )

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

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

Net income (loss) — — 3,626 — — ( 83 ) 3,543

Other comprehensive income, net of tax:

Net loss — — ( 45,564 ) — — ( 113 ) ( 45,677 )

Other comprehensive loss, net of tax:

Pension liability adjustment — — — — 1,405 — 1,405

Foreign currency translation adjustment — — — — ( 5,639 ) 15 ( 5,624 )

Unrealized derivative loss on cash flow hedges — — — — 131 — 131

Unrealized derivative gain on cash flow hedges — — — — 1,755 — 1755

Cash flow hedges reclassified to earnings — — — — 159 — 159

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Stock-based compensation — 2,380 — — — — 2,380

Investment of noncontrolling interest — — — — 619 619

Balance, December 31, 2022 111 41,303 123,169 ( 6,240 ) ( 21,165 ) 420 137,598

Net loss — — ( 45,564 ) — — ( 113 ) ( 45,677 )

Other comprehensive loss, net of tax:

Net income (loss) — — 1,464 — — ( 165 ) 1,299

Other comprehensive income, net of tax:

Pension liability adjustment — — — — 191 — 191

Foreign currency translation adjustment — — — — 2,428 29 2,457

Unrealized derivative gain on cash flow hedges — — — — 1,755 — 1,755

Cash flow hedges reclassified to earnings — — — — 159 — 159

Unrealized derivative loss on cash flow hedges — — — — ( 704 ) — ( 704 )

Purchase of 134,208 common shares for treasury

— — — ( 2,310 ) — — ( 2,310 )

Issuance of 91,316 common shares, net of shares withheld for taxes

1 unchanged sentence

Stock-based compensation — 4,179 — — — — 4,179

Investment of noncontrolling interest — — — — — 440 440

Balance, December 31, 2023 $ 111 $ 43,111 $ 124,633 $ ( 6,494 ) $ ( 19,250 ) $ 724 $ 142,835

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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 (“Rail”), Precast Concrete Products (“Precast”), and Steel Products and Measurement.

Effective for the quarter and year ended December 31, 2023, the Company implemented operational changes in how its Chief Operating Decision Maker (“CODM”) manages its businesses, including resource allocation and operating decisions.

As a result of these changes, the Company now has two (previously three ) operating segments, representing the individual businesses that are run separately under the new structure:

Rail, Technologies, and Services (“Rail”) and Infrastructure Solutions (“Infrastructure”).

The Rail segment is comprised of several manufacturing and distribution businesses that provide a variety of products and services for freight and passenger railroads and industrial companies throughout the world.

The Precast segment is composed of five precast concrete manufacturing facilities across the United States (“U.S.”) providing engineered precast concrete solutions.

The Steel Products and Measurement segment is composed of fabricated bridge, protective coating, threading, and precision measurement offerings across North America.

The Infrastructure segment is composed of nine operating facilities across the US providing engineered precast concrete solutions, as well as fabricated bridge, protective pipe coating, and pipe threading offerings across North America.

On November 17, 2023, the Company acquired the operating assets of Cougar Mountain Precast, LLC (“Cougar”), located in Caldwell, Idaho, which is a licensed manufacturer of Redi-Rock and natural concrete products for $ 1,644 , subject to working capital adjustments and hold back payments, to be paid over the next twelve months or utilized to satisfy post-close working capital adjustments or indemnity claims.

Cougar has been included in the Infrastructure segment.

On August 30, 2023, the Company announced the discontinuation of its Bridge Products grid deck product line and expects to complete any remaining customer obligations in 2024.

The grid deck product line is reported in the Bridge Products business unit within the Infrastructure 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.

The Ties business was reported in the Rail Products business unit within the Rail 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 (“Chemtec”), for $ 5,344 in proceeds, subject to final working capital adjustments.

The Chemtec business was reported in the Coatings and Measurement business unit within the Infrastructure segment.

On June 21, 2022, the Company acquired the stock of Skratch Enterprises Ltd.

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On August 12, 2022, the Company acquired the operating assets of VanHooseCo Precast LLC (“VanHooseCo”) for $ 52,146 , 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 into an escrow account to cover breaches of representations and warranties.

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

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

The Company retained all pre-closing receivables and liabilities associated with the division.

The sale included substantially all inventory associated with the division, as well as the related fixed assets.

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

An amount equal to $ 2,500 of the purchase price was deposited into an escrow account to cover breaches of representations and warranties, all of which was released from escrow as of December 31, 2023.

VanHooseCo has been included in the Company’s Infrastructure segment.

Use of estimates

The preparation of financial statements in conformity with U.S.

generally accepted accounting principles (“U.S.

GAAP”) requires management to make estimates, judgements, and assumptions that affect the amounts reported in the financial statements and accompanying notes.

The preparation of financial statements in conformity with US generally accepted accounting principles (“US GAAP”) requires management to make estimates, judgements, and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Actual results could differ from those estimates and changes in these estimates are recorded when known.

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The Company considers cash and other instruments with maturities of three months or less when purchased to be cash and cash equivalents.

The Company invests available funds in a manner to preserve investment principal and maintain liquidity, while seeking the highest yield available.

The Company invests available funds in a manner to preserve investment principal and maintain liquidity.

Cash and cash equivalents held in non-domestic accounts were $ 2,193 and $ 2,012 as of December 31, 2023 and 2022, respectively.

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Slow-moving inventory is reviewed and adjusted regularly, based upon product knowledge, physical inventory observation, inventory turnover, and the age of the inventory.

Inventory contains product costs, including materials, inbound freight, direct labor, overhead costs relating to the manufacturing and distribution

of products, and absorption costs representing the excess manufacturing or production costs over the amounts charged to the cost of sales or services.

Inventory costs include materials, direct labor, manufacturing overhead, and other direct costs.

Property, plant, and equipment

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Major renewals and betterments that substantially extend the useful life of the property are capitalized at cost.

Upon the sale or other disposition of assets, the costs and related accumulated depreciation and amortization are removed from the accounts and the resulting gain or loss, if any, is reflected in “Other income - net” in the Consolidated Statements of Operations.

Upon the sale or other disposition of assets, the costs and related accumulated depreciation and amortization are removed from the accounts and the resulting gain or loss, if any, is reflected in “Other expense (income) - net” in the Consolidated Statements of Operations.

Allowance for credit losses

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, bad debt expense experience, current and expected market conditions, and any other relevant subjective adjustments as needed.

Trade receivables are pooled within the calculation based on a range of ages, grouping receivables of similar credit risk together.

Reserve thresholds to calculate the allowance for credit loss are based on historic collection patterns, bad debt expense incurred, and expected future trends of collections.

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, bad debt expense experience, expected future trends of collections, current and expected market conditions, and any other relevant subjective adjustments as needed.

Management maintains high-quality credit review practices and positive customer relationships that mitigate credit risks.

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The Company has also established policies regarding allowance for credit losses associated with contract assets, which includes standalone reserve assessments for its long term, complex contracts as needed as well as detailed regular review and updates to contract margins, progress, and value.

A standard reserve threshold is applied contract assets related to short term, less complex contracts.

A standard reserve threshold is applied to contract assets related to short term, less complex contracts.

Management also regularly reviews collection patterns and future expected collections and makes necessary revisions to allowance for credit losses related to contract assets.

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the income approach, the market approach, and the asset approach.

The Company primarily relied on the discounted cash flow method within the income approach to value the reporting units.

The Company uses a combination of a discounted cash flow method and a market approach to determine the fair values of the reporting units.

Any impairment charges are based on both historic and future expected business results that no longer support the carrying value of the reporting unit.

The Company also monitors the recoverability of the long-lived assets associated with certain reporting units of the Company and the long-term financial projections of the businesses to assess for asset impairment.

The Company also monitors the recoverability of the long-lived assets associated with the asset groups of the Company and the long-term financial projections of the businesses to assess for asset impairment.

The Company has no indefinite-lived intangible assets.

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Environmental compliance costs, which principally include the disposal of waste generated by routine operations, are expensed as incurred.

Capitalized environmental costs, when appropriate, are depreciated over their useful life.

Reserves are not reduced by potential claims for recovery and are not discounted.

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Foreign currency translation

The assets and liabilities of the Company’s foreign subsidiaries are measured using the local currency as the functional currency and are translated into U.S.

dollars at exchange rates as of the balance sheet date.

The assets and liabilities of the Company’s foreign subsidiaries are measured using the local currency as the functional currency and are translated into US dollars at exchange rates as of the balance sheet date.

Income statement amounts are translated at the weighted-average rates of exchange during the year.

The translation adjustment is accumulated as a separate component of “Accumulated other comprehensive loss” within the Consolidated Balance Sheets.

Foreign currency transaction gains and losses are included in “Other income or expense.” For the years ended December 31, 2022 and 2021, foreign currency transaction loss of $ 434 and $ 452 , respectively, were included in “Other income - net” in the Consolidated Statements of Operations.

Foreign currency transaction gains and losses are included in “Other income or expense.” For the years ended December 31, 2023 and 2022, foreign currency transaction loss of $ 77 and $ 434 , respectively, were included in “Other expense (income) - net” in the Consolidated Statements of Operations.

Research and development

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For the years ended December 31, 2023 and 2022, research and development expenses were $ 2,555 and $ 2,219 , respectively, and were principally related to the Company’s friction management and railroad monitoring system products within the Rail segment.

Reclassifications

Certain accounts in the prior year consolidated financial statements have been reclassified for comparative purposes principally to conform to the presentation in the current year period, including the changes in business segments.

Recently issued accounting guidance

In March 2020, the FASB issued Accounting Standards Update 2020-04, “Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued.

The amendments are effective for all

entities as of March 12, 2020 through December 31, 2022.

In November 2023, the FASB issued Accounting Standards Update 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires enhanced disclosures regarding significant segment expenses that are regularly reviewed by the chief operating decision maker (“CODM”) and included in each reported measure of segment profit or loss, including an amount for “other segment items” by reportable segment and a description of its composition.

ASU 2023-07 also requires entities to disclose the title and position of the CODM and an explanation of how the CODM uses reported measures of segment profit or loss to assess performance and allocate resources.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 with early adoption permitted.

The Company did not identify any material impact from the provision of ASU 2023-07 on its financial condition, results of operations, and cash flows.

In December 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”).

ASU 2023-09 requires entities to disclose additional information with respect to the effective tax rate reconciliation and disaggregation of income tax expense and income taxes paid by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of ASU 2023-09, but does not expect this standard to have a material effect on its financial condition, results of operations, and cash flows.

Business Segments

The Company is a global 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’ challenging requirements.

The Company maintains locations in North America, South America, Europe, and Asia where it markets its products and services primarily through an internal sales force.

The Company has three reporting segments:

the Rail, Technologies, and Services segment, the Precast Concrete Products segment, and the Steel Products and Measurement segment.

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 (“CODM”), who uses such information to make decisions about resources to be allocated to the segments, and (c) for which discrete financial information is available.

Effective for the quarter and year ended December 31, 2023, the Company implemented operational changes in how its CODM manages its businesses, including resource allocation and operating decisions.

As a result of these changes, the Company now has two operating segments, representing the individual businesses that are run separately under the new structure.

The Company's new reportable segments are:

the Rail, Technologies, and Services segment and Infrastructure Solutions segment.

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 CODM, who uses such information to make decisions about resources to be allocated to the segments, and (c) for which discrete financial information is available.

The Infrastructure segment is comprised of the previous Precast Concrete Products and Steel Products and Measurement (now Steel Products business unit) segments, and the Company has restated segment information for the historical periods presented herein to conform to the current presentation.

This change in segment presentation does not affect the Company’s consolidated statements of income, balance sheets, or statements of cash flows.

Operating segments are evaluated on their segment profit contribution to the Company’s consolidated results.

The Company considers the aggregation of operating segments into reporting segments based on nature of offerings, nature of production services, the type or class of customer for products and services, methods used to distribute products and services, and economic and regulatory environment conditions.

The Company’s Rail, Technologies, and Services reporting segment is the aggregation of the Rail Products and Global Friction Management and the Technology Services and Solutions operating segments, which was evaluated based on the factors outlined above.

The Rail, Technologies, and Services reporting segment engineers, manufactures, and assembles friction management products and railway wayside data collection, application systems, railroad condition monitoring systems and equipment, wheel impact load detection systems, management systems, and provides services for these products.

The Rail, Technologies, and Services segment also provides a full line of new and used rail, trackwork, and accessories to railroads, mines, and other customers in the rail industry as well as designs and produces insulated rail joints, power rail, track fasteners, concrete railroad ties, coverboards, and special accessories for mass transit and other rail systems.

In addition, the Rail, Technologies, and Services segment provides controls, display, and telecommunication contract management solutions for the transit, control room, and customer information and display sectors to enhance safety, operational efficiency, and customer experience.

On June 21, 2022, the Company acquired the stock of Skratch, located in Telford, United Kingdom, which offers a single-point supply solution model for clients, and enabling large scale deployments of its intelligent digital signage solutions.

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.

Additionally, on August 1, 2022, the Company divested its Track Components business located in St-Jean-sur-Richelieu, Quebec, Canada, which resulted in a pre-tax loss of $ 467 .

Results of the Track Components business are included in the Company’s Rail Products business unit within the Rail, Technologies, and Services segment.

The Company’s Precast Concrete Products segment produces precast concrete buildings and a variety of specialty precast concrete products for use in several infrastructure end markets, including transportation and general infrastructure.

Precast concrete buildings are primarily used as restrooms, concession stands, and protective storage buildings in national, state, and municipal parks, while other precast products include sound walls, bridge beams, box culverts, septic tanks, and other custom pre-stressed products.

On August 12, 2022, the Company acquired the operating assets of 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 and has been included in the Precast Concrete Products segment.

The Company’s Steel Products and Measurement segment sells bridge decking, bridge railing, structural steel fabrications, expansion joints, bridge forms and other products for highway construction and repair.

This segment also produces threaded pipe products for industrial water well and irrigation markets as well as the oil and gas markets.

Lastly, this segment provides pipe coatings for oil and gas pipelines and utilities, precision measurement systems for the oil and gas market.

On September 24, 2021, the Company completed the sale of its Piling Products business.

The Company retained all pre-closing receivables and liabilities associated with the business.

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

Results of the Piling Products business were included in the Company’s Steel Products and Measurement segment.

The Company considers the aggregation of operating segments into reporting segments based on the nature of offerings, nature of production services, the type or class of customer for products and services, methods used to distribute products and services, and economic and regulatory environment conditions.

The Company’s Rail reporting segment consists of the Rail Products, Global Friction Management, and Technology Services and Solutions business units, which was evaluated based on the factors outlined above.

The Rail reporting segment engineers, manufactures, and assembles friction management products and railway wayside data collection, application systems, railroad condition monitoring systems and equipment, wheel impact load detection systems, management systems, and provides services for these products.

The Rail segment also provides a full line of new and used rail, trackwork, and accessories to railroads, mines, and other customers in the rail industry as well as designs and produces insulated rail joints, power rail, track fasteners, coverboards, and special accessories for mass transit and other rail systems.

In addition, the Rail segment provides controls, display, and telecommunication contract management solutions for the transit, control room, and customer information and display sectors to enhance safety, operational efficiency, and customer experience.

The Ties business was reported in the Rail Products business unit within the Rail segment.

On June 21, 2022, the Company acquired the stock of Skratch.

Skratch is located in Telford, United Kingdom, and offers a single-point supply solution model for clients, and enabling large scale deployments of its intelligent digital signage solutions.

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

Additionally, on August 1, 2022, the Company divested its Track Components business located in St-Jean-sur-Richelieu, Quebec, Canada.

Results of the Track Components business are included in the Company’s Rail Products business unit within the Rail segment.

Refer to Note 3 for further details on acquisitions and divestitures.

The Company’s Infrastructure segment produces precast concrete buildings and a variety of specialty precast concrete products for use in several infrastructure end markets, including transportation, energy, and general infrastructure.

The precast concrete buildings are primarily used as restrooms, concession stands, and protective storage buildings in national, state, and municipal parks, while other precast products include sound walls, bridge beams, box culverts, septic tanks, and other custom pre-stressed products.

The segment also produces threaded pipe products for industrial water well and irrigation markets as well pipe coatings for oil and gas markets.

In addition, the segment sells bridge decking, bridge railing, structural steel fabrications, expansion joints, bridge forms and other products for highway construction and repair.

Lastly, this segment provides pipe coatings for oil and gas pipelines and utilities.

On March 30, 2023, the Company sold substantially all the operating assets of its Precision Measurement Products and Systems business, Chemtec Energy Services LLC (“Chemtec”).

The Chemtec business was reported in the Coatings and Measurement business unit within the Infrastructure segment.

On August 12, 2022, the Company acquired the operating assets of VanHooseCo, a privately-held business headquartered in Loudon, Tennessee.

VanHooseCo specializes in precast concrete walls, water management products, and traditional precast products for the industrial, commercial, and residential infrastructure markets and has been included in the Infrastructure segment.

Refer to Note 3 for further details on acquisitions and divestitures.

Segment profit from operations includes allocated corporate operating expenses.

Operating expenses related to corporate headquarter functions were allocated to each segment 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.

Other income and expenses, interest, income taxes, and certain other items are managed on a consolidated basis.

The expense allocation excludes certain corporate costs that are separately managed from the segments including interest, income taxes, and certain other items that are included in other income and expense and are managed on a consolidated basis.

Management believes the allocation of corporate operating expenses provides an accurate presentation of how the segments utilize corporate support activities.

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The operating results and assets of the Company’s reportable segments were as follows as of and for the year ended December 31, 2023:

Net Sales Segment Operating Profit (Loss) Segment Assets Depreciation/Amortization Expenditures for Long-Lived Assets

Net Sales Segment Operating Profit Segment Assets Depreciation/Amortization Expenditures for Long-Lived Assets

Rail, Technologies, and Services $ 312,160 $ 11,940 $ 157,023 $ 5,172 $ 1,915

Precast Concrete Products 104,212 1,692 108,598 3,162 2,833

Steel Products and Measurement 92,693 ( 10,824 ) 54,516 4,502 267

Infrastructure Solutions 231,584 9,988 130,667 8,262 2,707

Total $ 543,744 $ 21,928 $ 287,690 $ 13,434 $ 4,622

Included in the Rail operating profit for the year ended December 31, 2023 was a $ 1,862 expense related to bad debt due to a customer filing for administrative protection and a $ 676 expense related to restructuring, both of which were within the Company’s UK based Technology Services and Solutions business.

The operating results and assets of the Company’s reportable segments were as follows as of and for the year ended December 31, 2022:

1 unchanged sentence

Rail, Technologies, and Services $ 300,592 $ 11,454 $ 172,111 $ 5,620 $ 1,218

Precast Concrete Products 70,990 1,545 48,740 1,716 2,441

Steel Products and Measurement 142,881 ( 2,402 ) 58,377 4,738 78

Infrastructure Solutions 196,905 ( 9,132 ) 163,114 7,664 3,100

Total $ 497,497 $ 2,322 $ 335,225 $ 13,284 $ 4,318

Included in the Infrastructure operating loss for the year ended December 31, 2022 were pre-tax impairment charges of $ 8,016 associated with goodwill and intangible assets within the Steel Products business unit.

During 2023 and 2022, no single customer accounted for more than 10% of the Company’s consolidated net sales.

4 unchanged sentences

Interest expense - net ( 5,528 ) ( 3,340 )

Other income - net 1,550 3,075

Other (expense) income - net ( 3,666 ) 1,550

Corporate expense and other unallocated charges ( 11,790 ) ( 9,528 )

(Loss) income from continuing operations before income taxes $ ( 8,996 ) $ 4,590

Income (loss) before income taxes $ 944 $ ( 8,996 )

Total segment assets $ 287,690 $ 335,225

22 unchanged sentences

The following table summarizes the Company’s sales by major product and service line for the years ended December 31:

Rail Products and Global Friction Management $ 255,713 $ 248,237

Rail Products $ 205,797 $ 202,559

Global Friction Management 63,946 54,811

Technology Services and Solutions 42,417 43,222

Rail, Technologies, and Services 312,160 300,592

Precast Concrete Buildings 61,143 55,993

Other Precast Concrete Products 43,069 14,997

Precast Concrete Products 136,458 104,212

Coatings and Measurement 38,329 27,833

Fabricated Steel Products 54,364 115,048

Steel Products and Measurement 92,693 142,881

Steel Products 95,126 92,693

Infrastructure Solutions 231,584 196,905

Total net sales $ 543,744 $ 497,497

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

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

VanHooseCo Precast LLC

On August 12, 2022, the Company acquired the operating assets of 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 $ 52,146 , 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.

The Company acquired VanHooseCo for $ 52,146 , net of cash acquired at closing.

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, all of which was released from escrow as of December 31, 2023.

The acquisition agreement includes two employment agreements whereby principals had 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 business unit within the Infrastructure 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.

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

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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, 2021 nor are they necessarily indicative of future consolidated results of operations.

The following unaudited pro forma information is provided for informational purposes only, and they are not necessarily indicative of future consolidated results of operations.

Net sales $ 522,997

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Pro forma $ ( 4.16 )

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

The following table summarizes estimated fair values of the assets acquired and liabilities assumed at the date of the VanHooseCo and Skratch acquisitions, including final purchase accounting adjustments as of December 31, 2023:

Allocation of purchase price VanHooseCo Skratch

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See Note 16 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.

There were no material purchase accounting adjustments made in 2023 as the Company finalized purchase accounting within the allowable measurement period.

Divestiture Summary

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Cash proceeds from the transaction were $ 7,795 , subject to indemnification obligations and working capital adjustments, resulting in a pre-tax loss of $ 467 .

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 resulting in a pre-tax gain of $ 3,230 .

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

The Track Components business was reported in the Rail Products business unit within the Rail segment.

On March 30, 2023, the Company sold substantially all the operating assets of its Chemtec business, which was inclusive of its entire Precision Measurement Products and Services division, located in Willis, TX.

Cash proceeds from the transaction were $ 5,344 , subject to final working capital adjustments, resulting in a pre-tax loss of $ 2,065 .

The Chemtec business was reported in the Steel Products business unit within the Infrastructure segment.

Cash proceeds from the transaction were $ 2,362 , subject to final working capital adjustments, generating a pre-tax loss of $ 1,009 .

The Ties business was reported in the Rail Products business unit within the Rail segment.

The Company’s revenues are comprised of product and service sales, including products and services provided under long-term agreements with its customers.

All revenue is recognized when the Company satisfies its performance obligations under the contract, either implicit or explicit, by transferring the promised product or rendering a service to its customer either when or as its customer obtains control of the product or as the service is rendered.

All revenue is recognized when the Company satisfies its performance obligations under the contract, either implicit or explicit, by transferring the promised product or rendering a service to its customer either when its customer obtains control of the product or as the service is rendered.

A performance obligation is a promise in a contract to transfer a distinct product or render a specific service to a customer.

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Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services.

Revenue is recorded net of returns, allowances, customer discounts, and incentives.

Revenue is recorded net of returns, allowances, and customer discounts.

Sales, value added, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenues) basis.

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The Company’s performance obligations under long-term agreements with its customers are generally satisfied over time.

Over time revenue is primarily comprised of transit infrastructure projects within the Rail segment, precast concrete buildings within the Precast Concrete Products segment, and long-term bridge projects within the Fabricated Steel Products division and custom precision metering systems within the Coatings and Measurement division in the Steel Products and Measurement segment.

Revenue under these long-term agreements is generally 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 the Company’s performance to date under the terms of the contract.

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.

Over time revenue is primarily comprised of transit infrastructure and technology services and solutions projects within the Rail segment, precast concrete buildings within the Precast Concrete Products division in the Infrastructure segment, and long-term bridge projects and custom precision metering systems within the Steel Products division in the Infrastructure segment.

Revenue under these long-

term agreements is generally 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 the Company’s performance to date under the terms of the contract, or an output method, specifically units delivered, based upon certain customer acceptance and delivery requirements.

The Company records contract liabilities in “Deferred revenue” within the Consolidated Balance Sheets.

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These assumptions include, among other things, labor productivity, cost and availability of materials, and timing of funding by customers.

The nature of these long-term agreements may give rise to several types of variable consideration, such as claims, awards, and incentive fees.

Contract estimates may include additional revenue for submitted contract modifications if there exists an enforceable right to the modification, the amount can be reasonably estimated, and its realization is probable.

The nature of these long-term agreements may give rise to several types of variable consideration, such as claims and awards.

Contract estimates may include additional revenue for submitted contract modifications, including at times unapproved change orders, if there exists an enforceable right to the modification, the amount can be reasonably estimated, and its realization is probable.

These estimates are based on historical collection experience, anticipated performance, and the Company’s best judgment at that time.

These amounts are generally included in the contract’s transaction price and are allocated over the remaining performance obligations.

Changes in judgments related to the estimates above, customer disputes, or changes in contract terms could impact the timing and amount of revenue recognized and, accordingly, the timing and amount of associated income.

As a result of management's reviews of contract-related estimates the Company makes adjustments to contract estimates that impact our revenue and profit totals.

Changes in estimates are primarily attributed to updated considerations, including economic conditions and historic contract patterns, resulting in changes to anticipated revenue from existing contracts.

In the event that a contract loss becomes known, the entire amount of the estimated loss is recognized in the Consolidated Statements of Operations.

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Point in time revenue accounted for 72.6 % and 72.7 % of revenue for the years ended December 31, 2023 and 2022, respectively.

The Company recognizes revenue at the point in time in which the customer

obtains control of the product or service, which is generally when product title passes to the customer upon shipment or the service has been rendered to the customer.

The Company recognizes revenue at the point in time in which the customer obtains control of the product or service, which is generally when product title passes to the customer upon shipment or the service has been rendered to the customer.

In limited cases, title does not transfer upon shipment and revenue is not recognized until the customer has received the products at a designated physical location.

For the years ended December 31, 2023 and 2022, net sales by the timing of the transfer of goods and services were as follows:

Year Ended December 31, 2022 Rail, Technologies, and Services Precast Concrete Products Steel Products and Measurement Total

Year Ended December 31, 2023 Rail, Technologies, and Services Infrastructure Solutions Total

Point in time $ 254,345 $ 140,679 $ 395,024

1 unchanged sentence

Total net sales $ 312,160 $ 231,584 $ 543,744

Year Ended December 31, 2021 Rail, Technologies, and Services Precast Concrete Products Steel Products and Measurement Total

Year Ended December 31, 2022 Rail, Technologies, and Services Infrastructure Solutions Total

Point in time $ 241,759 $ 119,828 $ 361,587

1 unchanged sentence

Total net sales $ 300,592 $ 196,905 $ 497,497

During 2023, the Company recorded $ 8,718 in reductions to net sales stemming from changes in actual and expected values of certain commercial contracts, including $ 2,987 associated with the Bridge Exit and other settled contracts.

Such adjustments were $ 4,800 in 2022, including the $ 3,956 impact of the Crossrail Settlement.

See Note 2 for additional information for the Company’s net sales by major product and service category.

The timing of revenue recognition, billings, and cash collections results in billed receivables, costs in excess of billings (contract assets), and billings in excess of costs (contract liabilities), included in deferred revenue on the Consolidated Balance Sheets.

As of December 31, 2022 and 2021, the Company's contract asset balances were $ 33,613 and $ 36,179 , respectively, with significant changes during the year due to transfers of contract assets to receivables of $ 15,018 and $ 24,501 , respectively.

As of December 31, 2022 and 2021, contract liabilities, recorded within deferred revenue, were $ 6,781 and $ 3,245 , respectively.

Advanced payments from customers typically relate to contracts with respect to which the Company has significantly fulfilled its obligations, but due to the Company’s continuing involvement with the project, revenue is not recognized until title, ownership, and risk of loss have passed to the customer.

Significant changes in contract liabilities during the year ended December 31, 2022 and 2021 included increases of $ 2,910 and $ 3,245 , respectively, due to billings in excess of costs, excluding amounts recognized as revenue during the period.

During the years ended December 31, 2022 and 2021, contract liabilities were reduced due to revenue recognized of $ 2,665 and $ 917 , respectively, from contract liability balances.

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

Contract Assets

Contract asset balance as of December 31, 2022 $ 33,613

Net additions to contract assets 9,638

Transfers from contract asset balance to accounts receivable ( 13,762 )

Contract asset balance as of December 31, 2023 $ 29,489

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

Contract Liabilities

Contract liability balance as of December 31, 2022 $ 6,781

Revenue recognized from contract liabilities ( 5,121 )

Increase in billings in excess of costs, excluding revenue recognized 2,204

Other adjustments, including business divestiture ( 1,675 )

Balance as of December 31, 2023 $ 2,189

As of December 31, 2023, the Company had approximately $ 213,780 of remaining performance obligations, which is also referred to as backlog.

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As of December 31, 2023 and 2022, the following table represents the goodwill balance by reportable segment:

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

Rail, Technologies, and Services Infrastructure Solutions Total

Balance as of December 31, 2021:

2 unchanged sentences

Foreign currency translation impact ( 178 ) — ( 178 )

Impairment charges — ( 3,011 ) ( 3,011 )

Balance as of December 31, 2022:

2 unchanged sentences

Foreign currency translation impact 518 — 518

Impairment charges — — ( 3,011 ) ( 3,011 )

Balance as of December 31, 2023:

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The Company determined the implied fair values of its reporting units by using Level 3 unobservable inputs, which incorporated assumptions that we believe would be a reasonable market participant’s view in a hypothetical purchase, to develop the discounted cash flows of the respective reporting units.

Significant Level 3 inputs included estimates of future revenue growth, gross margin, and earnings before interest, taxes, depreciation, and amortization (“EBITDA”).

The results of the test indicated that the

Fabricated Bridge Products reporting unit’s respective fair value was less than its carrying value.

All other reporting units that maintain goodwill adequately exceeded their carrying value and were not subject to impairment.

Significant Level 3 inputs included estimates of future revenue growth, earnings before interest, taxes, depreciation, and amortization (“EBITDA”) contribution, and market participant assumptions.

The results of the test indicated that all reporting units that maintain goodwill adequately exceeded their carrying value and were not subject to impairment.

However, headroom in the Rail Technologies and Precast Concrete Products reporting units indicate that should results or future projections diverge from current expectations, the reporting units could be subject to future impairment.

As a result of the procedures performed as outlined above, the Company impaired 100 % of goodwill held in the Fabricated Bridge reporting unit in the fourth quarter of 2022, resulting in a non-cash pre-tax impairment charge of $ 3,011 .

As a result of the procedures performed as outlined above, no impairments were recorded in 2023.

In the fourth quarter of 2022, the Company impaired 100 % of goodwill held in the Fabricated Bridge reporting unit, resulting in a non-cash pre-tax impairment charge of $ 3,011 .

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

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Amortization Net

Non-compete agreements 1 $ 27 $ ( 16 ) $ 11

Patents 10 $ 335 $ ( 199 ) $ 136

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Amortization Net

Non-compete agreements 1 $ 27 $ ( 16 ) $ 11

Patents 10 330 ( 187 ) 143

2 unchanged sentences

Technology 14 32,201 ( 25,827 ) 6,374

Favorable lease 6 327 ( 23 ) 304

$ 68,002 $ ( 44,171 ) $ 23,831

1 unchanged sentence

Amortization expense for the years ended December 31, 2023 and 2022 were $ 5,314 and $ 6,144 , respectively.

During the year ended December 31, 2023, certain fully amortized intangible assets of $ 27 related to non-compete agreements were eliminated from gross intangible assets and accumulated amortization.

During the year ended December 31, 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.

2 unchanged sentences

2029 and thereafter 5,856

During the year ended December 31, 2022, management performed a recoverability test on a reporting unit for which there was an indication that it was more likely that not that the carrying value of the long-lived asset group would not be recoverable.

The results of this test concluded that the long-lived assets associated with the Company’s Precision Measurement Products and Systems business based in Willis, TX, which resides in the Steel Products and Measurement segment, had carrying values in excess of their fair value.

Based on third party valuation and appraisal reports, the Company developed a reasonable fair value of the long-lived assets for this reporting unit.

As a result of the analysis and valuation exercises performed, in the fourth quarter of 2022, the Company recorded $ 4,883 in non-cash, pre-tax impairment charges associated with the reporting unit’s intangible assets, equal to 100% of their carrying value.

During the year ended December 31, 2022, management performed a recoverability test on a reporting unit for which there was an indication that it was more likely than not that the carrying value of the long-lived asset group would not be recoverable.

As a result of the analysis and valuation exercises performed, in the fourth quarter of 2022, the Company recorded $ 4,883 in non-cash, pre-tax impairment charges associated with the Company's Precision Measurement Products and Systems business based in Willis, TX, equal to 100% of their carrying value.

Impairment was inclusive of $ 3,828 , $ 394 , and $ 661 related to customer relationships, trade name, and developed technology, respectively.

On June 21, 2022, the Company acquired the stock of Skratch Enterprises Ltd.

On August 12, 2022, the Company acquired the operating assets of VanHooseCo Precast LLC (“VanHooseCo”).

As of December 31, 2023, the purchase accounting for these transactions is final.

Purchase accounting adjustments recognized during the year ended December 31, 2023 were immaterial.

Accounts Receivable

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Accounts receivable - net $ 53,484 $ 82,455

Changes in reserves for uncollectible accounts are recorded as part of “Selling and administrative expenses” in the Consolidated Statements of Operations, and were an expense of $ 382 and income of $ 87 for the years ended December 31, 2022 and 2021, respectively.

Changes in reserves for uncollectible accounts are recorded as part of “Selling and administrative expenses” in the Consolidated Statements of Operations, and were an expense of $ 1,912 and $ 382 for the years ended December 31, 2023 and 2022, respectively.

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

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Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments.

As most of the Company’s leases

do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments.

The Company uses the implicit rate when readily determinable.

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The Credit Agreement, as amended, modifies the prior revolving credit facility, as amended, on terms more favorable to the Company and extends the maturity date 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.

The obligation of the Company and its domestic, Canadian, and United Kingdom subsidiaries (the “Guarantors”) under the Credit Agreement will be secured by the grant of a security interest by the Borrowers and Guarantors in substantially all of the assets owned by such entities.

Additionally, the equity interests in each of the loan parties, other than the Company, and the equity interests held by each loan party in their subsidiaries, will be pledged to the lenders as collateral for the lending obligations.

Prior to the Credit Agreement's amendment on August 12, 2022, borrowings under the Credit Agreement were subject to interest at rates based upon either the base rate or LIBOR rate plus applicable margins.

Applicable margins were dictated by the ratio of the Company’s total net indebtedness to the Company’s consolidated EBITDA for four trailing quarters, as defined in the Credit Agreement.

The base rate was the highest of (a) the Overnight Bank Funding Rate plus 50 basis points, (b) the Prime Rate, or (c) the Daily LIBOR rate plus 100 basis points so long as the Daily LIBOR Rate is offered, ascertainable, and not unlawful (each as defined in the Credit Agreement).

The base rate and LIBOR rate spreads ranged from 25 to 125 basis points and 125 to 225 basis points, respectively.

The Credit Agreement provides for a five-year , revolving credit facility that permits aggregate borrowings of the Borrowers up to $ 130,000 with a sublimit of the equivalent of $ 25,000 US 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.

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, and (ii) 3.50 to 1.00 for all testing periods occurring during an Acquisition Period (as defined in the Credit Agreement), 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.

The Credit Agreement permits the Company to pay dividends and make distributions and redemptions with respect to its stock provided no event of default or potential default (as defined in the Credit Agreement) has occurred prior to or after giving effect to the dividend, distribution, or redemption.

Additionally, the Credit Agreement permits the Company to complete acquisitions so long as (a) no event of default or potential default has occurred prior to or as a result of such acquisition;

(b) the liquidity of the Borrowers is not less than $ 15,000 prior to and after giving effect to such acquisition;

and (c) the aggregate consideration for the acquisition does not exceed:

(i) $ 50,000 per acquisition, so long as the Gross Leverage Ratio (as defined in the Credit Agreement) is less than or equal to 2.75 after giving effect to such acquisition;

or (ii) $ 75,000 per acquisition, so long as the Gross Leverage Ratio is less than or equal to 1.75 after giving effect to such acquisition.

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.

On August 12, 2022, the Company entered into a second amendment to its Credit Agreement (the “Second Amendment”) to obtain approval for the VanhooseCo acquisition and temporarily modify certain financial covenants to accommodate the transaction.

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The base rate and LIBOR rate spreads range from 25 to 150 basis points and 125 to 250 basis points, respectively.

The obligation of the Company and its domestic, Canadian, and United Kingdom subsidiaries (the “Guarantors”) under the Credit Agreement is secured by the grant of a security interest by the Borrowers and Guarantors in substantially all of the assets owned by such entities.

As of December 31, 2023, the Company was in compliance with the covenants in the Credit Agreement, as amended.

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As of December 31, 2023 and 2022, the Company withheld 24,886 and 27,636 shares for approximately $ 315 and $ 410 , respectively, from employees to pay their withholding taxes in connection with the vesting of restricted stock awards.

There were no shares repurchased or dividends declared during the years ended December 31, 2022 and 2021.

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.

In connection with the stock repurchase program, 134,208 shares valued at $ 2,310 were repurchased during the year ended December 31, 2023 and no shares were repurchased for the year ended December 31, 2022.

There were no dividends declared during the years ended December 31, 2023 and 2022.

Treasury Outstanding

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Issued for stock-based compensation plans ( 91,316 ) 91,316

Repurchased common stock 134,208 ( 134,208 )

Balance at end of 2023 381,844 10,733,935

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Accumulated other comprehensive loss $ ( 19,250 ) $ ( 21,165 )

Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S.

subsidiaries.

Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-US subsidiaries.

See Note 14 for further information.

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(Share amounts in thousands)

The following table sets forth the computation of basic and diluted (loss) earnings per common share for the years ended December 31, 2022 and 2021:

The following table sets forth the computation of basic and diluted earnings (loss) per common share for the years ended December 31, 2023 and 2022:

Year Ended December 31,

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

Net (loss) income from continuing operations attributable to L.B.

Foster Company $ ( 45,564 ) $ 3,554

Income from discontinued operations — 72

Net (loss) income attributable to L.B.

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

Net income (loss) attributable to L.B.

Foster Company $ 1,464 $ ( 45,564 )

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Denominator for diluted earnings per common share - adjusted weighted average shares outstanding and assumed conversions 10,995 10,720

Basic (loss) earnings from continuing operations per common share $ ( 4.25 ) $ 0.33

Basic earnings from discontinued operations per common share — 0.01

Basic (loss) earnings per common share $ ( 4.25 ) $ 0.34

Diluted (loss) earnings from continuing operations per common share $ ( 4.25 ) $ 0.33

Diluted earnings from discontinued operations per common share — 0.01

Diluted (loss) earnings per common share $ ( 4.25 ) $ 0.34

There were 75 anti-dilutive shares for the year ended December 31, 2022.

(Loss) i ncome from continuing operations before income taxes, as shown in the accompanying Consolidated Statements of Operations, includes the following components for the years ended December 31, 2022 and 2021:

Basic earnings (loss) per common share $ 0.14 $ ( 4.25 )

Diluted earnings (loss) per common share $ 0.13 $ ( 4.25 )

There were 0 and 75 anti-dilutive shares for the years ended December 31, 2023 and December 31, 2022, respectively.

Income (loss) before income taxes, as shown in the accompanying Consolidated Statements of Operations, includes the following components for the years ended December 31, 2023 and 2022:

Year Ended December 31,

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Foreign ( 13,631 ) ( 3,922 )

(Loss) income from continuing operations, before income taxes $ ( 8,996 ) $ 4,590

Income (loss) before income taxes $ 944 $ ( 8,996 )

Significant components of the provision for income taxes for the years ended December 31, 2023 and 2022 were as follows:

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Federal $ ( 16 ) $ —

State 127 ( 237 )

Foreign 1,460 769

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Total deferred ( 1,852 ) 35,785

Total income tax expense $ 36,681 $ 1,119

Total income tax (benefit) expense $ ( 355 ) $ 36,681

The reconciliation of income tax computed at statutory rates to income tax expense for the years ended December 31, 2023 and 2022 is as follows:

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Non-deductible expenses 206 21.8 200 ( 2.2 )

Tax benefits related to disposition of the Test and Inspection Services business — — ( 2,130 ) ( 46.4 )

Non-deductible executive compensation 256 27.1 45 ( 0.5 )

Income tax credits ( 218 ) ( 23.1 ) ( 261 ) 2.9

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Other ( 19 ) ( 2.0 ) 55 ( 0.6 )

Total income tax expense / Effective rate $ 36,681 ( 407.7 ) % $ 1,119 24.4 %

Total income tax (benefit) expense / Effective rate $ ( 355 ) ( 37.6 ) % $ 36,681 ( 407.7 ) %

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2023 and 2022 were as follows:

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The foreign jurisdictions have incurred cumulative financial losses over the three-year period ended December 31, 2023 and have projected future taxable losses.

Based on information available as of December 31, 2022, the Company

believes it is more likely than not that the tax benefit from these loss carryforwards will not be realized.

In recognition of this risk, it has provided a valuation allowance of $ 948 , collectively, against deferred tax assets in foreign jurisdictions as of December 31, 2022.

Based on information available as of December 31, 2023, the Company believes it is more likely than not that the tax benefit from these loss carryforwards will not be realized.

In recognition of this risk, it

has provided a valuation allowance of $ 3,761 , collectively, against deferred tax assets in foreign jurisdictions as of December 31, 2023.

The determination to record or not record a valuation allowance involves managements’ judgment, based on the consideration of positive and negative evidence available at the time of the assessment.

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Ultimate realization of these tax benefits is dependent upon the occurrence of certain events, including the completion of audits by tax authorities and expiration of statutes of limitations.

The Company files income tax returns in the U.S.

and in various state, local, and foreign jurisdictions.

The Company files income tax returns in the US and in various state, local, and foreign jurisdictions.

The Company is subject to federal income tax examinations for the 2020 period and thereafter.

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Stock forfeitures and cancellations are recognized as they occur.

The Company recorded stock-based compensation expense of $ 2,380 and $ 1,945 for the years ended December 31, 2022 and 2021, respectively, related to fully-vested stock awards, restricted stock awards, and performance unit awards.

The Company recorded stock-based compensation expense of $ 4,179 and $ 2,380 for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2023, unrecognized compensation expense for awards that the Company expects to vest approximated $ 5,457 .

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Since May 2018, non-employee directors have been awarded shares of the Company’s common stock on each date the non-employee directors were elected at the annual shareholders’ meeting to serve as directors, subject to a one-year vesting requirement.

During the quarter ended June 30, 2017, the Nomination and Governance Committee and Board of Directors jointly approved the Deferred Compensation Plan for Non-Employee Directors under the Omnibus Plan and, by amendment, under the Equity and Incentive Compensation Plan, which permits non-employee directors of the Company to defer receipt of earned cash and/or stock compensation for service on the Board.

During the quarter ended June 30, 2017, the Nomination and Governance Committee and Board of Directors jointly approved the

Deferred Compensation Plan for Non-Employee Directors under the Omnibus Plan and, by amendment, under the Equity and Incentive Compensation Plan, which permits non-employee directors of the Company to defer receipt of earned cash and/or stock compensation for service on the Board.

During 2023 and 2022, the non-employee directors were granted a total of 39,312 and 45,840 restricted shares, respectively, which fully-vested as of December 31, 2023 and 2022, respectively.

Compensation expense recorded by the Company related to such awards to non-employee directors was approximately $ 468 and $ 697 for the years ended December 31, 2023 and 2022, respectively.

During 2022, 5,730 deferred share units were allotted to the accounts of the non-employee directors pursuant to the Deferred Compensation Plan for Non-Employee Directors.

During 2023, no deferred share units were allotted to the accounts of the non-employee directors pursuant to the Deferred Compensation Plan for Non-Employee Directors.

The weighted average fair value of all the restricted stock grants awarded was $ 13.00 and $ 13.09 per share for the years ended December 31, 2023 and 2022, respectively.

Restricted Stock Awards and Performance Unit Awards

Under the Omnibus Plan, the Company grants certain employees restricted stock and performance unit awards.

The forfeitable restricted stock awards granted subsequent to March 2015 generally time-vest ratably over a three-year period, unless indicated otherwise by the underlying restricted stock award agreement.

Under the Equity and Incentive Plan and Omnibus Plan, the Company grants certain employees restricted stock and performance unit awards.

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.

Performance unit awards are offered annually under separate three-year long-term incentive programs, unless indicated otherwise by the underlying performance unit award agreement.

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Outstanding as of December 31, 2023 264,970 12,404 560,338 $ 14.10

Performance units are subject to forfeiture and are 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 plan.

Commencing in 2022, Performance Stock Units may be earned annually during each year of the three year program and converted into restricted stock units which settle in common stock at the end of each three year period.

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In June 2022, under the Equity and Incentive Plan, the Company approved the Strategy Transformation Plan performance-based incentive stock award to incentivize key personnel for the strategic transformation of the Company.

Under the four-year program, participants shall be eligible for a performance stock unit award of Company common stock with 50 % of the shares earned based on the achievement of EBITDA Margin and 50 % of the shares earned based on the Company’s stock price.

In February 2021, under the Omnibus Plan, the Company established a performance-based incentive stock award retention program to incentivize and retain key personnel during the COVID-19 pandemic by driving stock price.

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The second 50 % of the shares ( 1,666 shares) are earned based on achievement of a consecutive thirty (30) day average NASDAQ closing price of $ 30.00 .

The value of any shares awarded will be determined using a Monte Carlo methodology at the time of payout.

The value of any shares awarded will be determined using a Monte Carlo methodology for the projected payout.

No shares earned are paid prior to March 1, 2024, and the program and opportunity to earn the shares expires on February 28, 2026.

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Total assets $ 1,225 $ — $ 1,225 $ — $ 1,947 $ 17 $ 1,930 $ —

Interest rate swaps $ — $ — $ — $ — $ 159 $ — $ 159 $ —

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

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

The Company accounted for $ 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 reclassified balances to earnings as the

underlying physical transactions occurred, unless it was no longer probable that the physical transaction would occur at which time the related gains deferred in Other Comprehensive Income would be immediately recorded in earnings.

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

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

These interest rate swaps expired February 2022.

For the year ended December 31, 2022 and 2021, the Company recognized interest expense of $ 71 and $ 958 , respectively, from interest rate swaps.

As a result of the dedesignation of the interest rate swaps, the Company recognized interest income of $ 157 and $ 940 from the change in fair value of the interest rate swaps in “Interest expense - net” in the Consolidated Statements of Operations for the twelve months ended December 31, 2022 and 2021, respectively.

For the years ended December 31, 2023 and 2022, the Company recognized interest income of $ 1,206 and $ 71 , respectively, from interest rate swaps.

As a result of the dedesignation of the interest rate swaps, the Company recognized interest income of $ 157 from the change in fair value of the interest rate swaps in “Interest expense - net” in the Consolidated Statements of Operations for year ended December 31, 2022.

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

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Retirement Plans

The Company has three retirement plans that cover its hourly and salaried employees in the U.S.:

The Company has three retirement plans that cover its hourly and salaried employees in the US:

one defined benefit plan, which is frozen, and two defined contribution plans.

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Fair value of assets at beginning of year $ 3,792 $ 4,767

Actual (loss) gain on plan assets ( 1,007 ) 434

Actual gain (loss) on plan assets 310 ( 1,007 )

Employer contribution 276 456

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These investments are classified as Level 1 of the fair value hierarchy.

The Company currently anticipates contributions of $ 400 to its U.S.

defined benefit plan in 2023.

The Company currently anticipates contributions of $ 370 to its US defined benefit plan in 2024.

The following benefit payments are expected to be paid during the years indicated:

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United Kingdom Defined Benefit Plan

The Company’s U.K.

defined benefit plan covers certain current employees, former employees, and retirees.

The Company’s UK defined benefit plan covers certain current employees, former employees, and retirees.

The plan has been frozen to new entrants since April 1, 1997 and also covers the former employees of a merged plan after January 2002.

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Fair value of assets at beginning of year $ 5,745 $ 8,409

Actual (loss) gain on plan assets ( 742 ) 522

Actual gain (loss) on plan assets 323 ( 742 )

Employer contribution 318 319

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Amounts recognized in the consolidated balance sheets consist of:

Other assets (long-term liabilities) $ 1,074 $ ( 726 )

Other assets $ 1,388 $ 1,074

Amounts recognized in accumulated other comprehensive loss consist of:

Net (gain) loss $ ( 1,425 ) $ 837

Net gain $ ( 567 ) $ ( 1,425 )

Prior service cost 71 90

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Year Ended December 31,

Components of net periodic benefit (gain) cost:

Components of net periodic benefit gain:

Interest cost $ 229 $ 135

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Recognized net actuarial loss 18 13

Net periodic pension (gain) cost $ ( 93 ) $ 46

Net periodic pension gain $ ( 75 ) $ ( 93 )

The weighted average assumptions in the following table represent the rates used to develop the actuarial present value of the projected benefit obligation for the year listed and also the net periodic benefit cost for the following year.

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Commercial property Not to exceed 50 %

Government securities Not to exceed 50 %

UK Government securities Not to exceed 50 %

Cash Up to 100 %

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Years 2029-2033 1,497

What changed 10-K

Item 8. Financial Statements and Supplementary Data