FOSTER L B CO 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of L.B. Foster Company Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of L.B. Foster Company and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15 (a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 7, 2025 expressed an adverse opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue recognition – contract estimates Description of the Matter As explained in Notes 1 and 3 to the consolidated financial statements, revenue is recognized when the Company satisfies its performance obligations under a contract. The Company’s performance obligations under long-term agreements with its customers are generally satisfied over time. Revenue under these long-term agreements is generally recognized over time using an input measure based upon the proportion of actual costs incurred to estimated total project costs, which the Company believes best depicts the Company’s performance to date under the terms of the contract. For the year ended December 31, 2024, the Company recorded $52.7 million of over time input method revenue within net sales on its consolidated statement of operations. Accounting for these long-term agreements involves the use of various techniques to estimate total revenues and costs. Contract estimates are based on various assumptions to project the outcome of future events that may span several years. These assumptions include, among other things, sub-contractor costs, material costs, and total collections from the customer. Significant changes in the above estimates could impact the timing and amount of revenue and profitability of the Company’s long-term contracts. Auditing these estimates requires auditor judgment because of the significant management judgment necessary to develop the estimated assumptions at completion due to the size and identified risks for each contract. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of relevant internal controls over the Company’s process relating to the determination of estimates for long-term projects. For example, we evaluated the design and tested the operating effectiveness of controls over management’s review of the current status of long-term projects, accumulation of costs incurred, costs remaining to complete and total contract value. To test the total estimates for long-term contracts, our audit procedures included, among others, obtaining an understanding of the contract, evaluating the consistency of estimated costs with the initial budget, and understanding margin changes throughout the life of the contract. We also performed a retrospective review of management’s estimates for a sample of completed contracts by comparing initial estimates with the actual historical data to assess management’s ability to estimate. /s/ Ernst & Young LLP We have served as the Company’s auditor since 1990 Pittsburgh, Pennsylvania March 7, 2025 31 T able of Contents L.B. FOSTER COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) December 31, 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 2,454 $ 2,560 Accounts receivable - net (Note 5) 64,978 53,484 Contract assets (Note 3) 16,720 29,489 Inventories - net (Note 6) 70,506 73,111 Other current assets 6,947 8,711 Total current assets 161,605 167,355 Property, plant, and equipment - net (Note 7) 75,374 75,579 Operating lease right-of-use assets - net (Note 8) 18,480 14,905 Other assets: Goodwill (Note 4) 31,907 32,587 Other intangibles - net (Note 4) 14,801 19,010 Deferred tax assets (Note 13) 28,900 — Other assets 3,483 2,965 TOTAL ASSETS $ 334,550 $ 312,401 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 50,083 $ 39,500 Deferred revenue (Note 3) 10,205 12,479 Accrued payroll and employee benefits 15,393 16,978 Current portion of accrued settlement (Note 17) — 8,000 Current maturities of long-term debt (Note 9) 167 102 Other accrued liabilities 12,448 17,442 Total current liabilities 88,296 94,501 Long-term debt (Note 9) 46,773 55,171 Deferred tax liabilities (Note 13) 1,150 1,232 Long-term operating lease liabilities (Note 8) 14,709 11,865 Other long-term liabilities 4,608 6,797 Stockholders’ equity: Common stock, par value $ 0.01 , authorized 20,000,000 shares; shares issued at December 31, 2024 and December 31, 2023, 11,115,779 ; shares outstanding at December 31, 2024 and December 31, 2023, 10,573,432 and 10,733,935 , respectively (Note 10) 111 111 Paid-in capital 43,550 43,111 Retained earnings 167,579 124,633 Treasury stock - at cost, common stock, shares at December 31, 2024 and December 31, 2023, 542,347 and 381,844 , respectively (Note 10) ( 11,208 ) ( 6,494 ) Accumulated other comprehensive loss (Note 11) ( 21,716 ) ( 19,250 ) Total L.B. Foster Company stockholders’ equity 178,316 142,111 Noncontrolling interest 698 724 Total stockholders’ equity 179,014 142,835 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 334,550 $ 312,401 The accompanying notes are an integral part of these Consolidated Financial Statements. 32 T able of Contents L.B. FOSTER COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share data) Year Ended December 31, 2024 2023 Sales of goods $ 462,659 $ 475,350 Sales of services 68,106 68,394 Total net sales (Note 3) 530,765 543,744 Cost of goods sold 352,556 368,197 Cost of services sold 60,147 63,503 Total cost of sales 412,703 431,700 Gross profit 118,062 112,044 Selling and administrative expenses 96,398 97,623 (Gain) on sale of former joint venture facility ( 3,477 ) — Amortization expense (Note 4) 4,628 5,314 Operating income 20,513 9,107 Interest expense - net 4,992 5,528 Other expense - net (Note 18) 1,076 2,635 Income before income taxes 14,445 944 Income tax benefit (Note 13) ( 28,398 ) ( 355 ) Net income 42,843 1,299 Net loss attributable to noncontrolling interest ( 103 ) ( 165 ) Net income attributable to L.B. Foster Company $ 42,946 $ 1,464 Basic earnings per common share (Note 12) $ 4.01 $ 0.14 Diluted earnings per common share (Note 12) $ 3.89 $ 0.13 Basic weighted average shares outstanding 10,721 10,799 Diluted weighted average shares outstanding 11,048 10,995 The accompanying notes are an integral part of these Consolidated Financial Statements. 33 T able of Contents L.B. FOSTER COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Year Ended December 31, 2024 2023 Net income $ 42,843 $ 1,299 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment ( 2,887 ) 2,428 Unrealized loss on cash flow hedges, net of tax benefit of $ 203 and $ 0 , respectively ( 593 ) ( 704 ) Pension and post-retirement benefit plans benefit, net of tax benefit $ 0 — 152 Reclassification of pension liability adjustments to earnings, net of tax expense of $ 424 and $ 0 , respectively* 1,014 39 Total comprehensive income 40,377 3,214 Less comprehensive loss attributable to noncontrolling interest: Net loss attributable to noncontrolling interest ( 103 ) ( 165 ) Foreign currency translation adjustment 77 29 Amounts attributable to noncontrolling interest ( 26 ) ( 136 ) Comprehensive income attributable to L.B. Foster Company $ 40,403 $ 3,350 * Reclassifications out of Accumulated other comprehensive loss for pension obligations are reflected in Selling and administrative expense and pension settlement costs are reflected in Other expense - net . The accompanying notes are an integral part of these Consolidated Financial Statements. 34 T able of Contents L.B. FOSTER COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 42,843 $ 1,299 Adjustments to reconcile net income to cash provided by operating activities: Deferred income taxes ( 29,145 ) ( 1,852 ) Depreciation 9,452 9,949 Amortization 4,628 5,314 Equity loss (income) in nonconsolidated investment 14 ( 51 ) Gain on sales and disposals of property, plant, and equipment ( 4,431 ) ( 459 ) Stock-based compensation 3,834 4,179 Loss on asset divestitures — 3,074 Change in operating assets and liabilities: Accounts receivable ( 12,262 ) 27,367 Contract assets 12,433 1,797 Inventories 2,376 ( 6,604 ) Other current assets 924 1,372 Other noncurrent assets ( 3,437 ) ( 403 ) Accounts payable 10,399 ( 4,558 ) Deferred revenue ( 2,230 ) ( 2,850 ) Accrued payroll and employee benefits ( 1,469 ) 6,364 Accrued settlement ( 8,000 ) ( 8,000 ) Other current liabilities ( 6,703 ) 2,555 Other liabilities 3,406 ( 1,537 ) Net cash provided by operating activities 22,632 36,956 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from the sale of property, plant, and equipment 3,895 539 Capital expenditures on property, plant, and equipment ( 9,791 ) ( 4,513 ) Acquisitions, net of cash acquired ( 416 ) ( 1,246 ) Proceeds from asset divestitures — 7,706 Net cash (used in) provided by investing activities ( 6,312 ) 2,486 CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of debt ( 230,640 ) ( 208,668 ) Proceeds from debt 222,646 171,408 Treasury stock acquisitions ( 8,237 ) ( 2,625 ) Consideration received from noncontrolling interest — 589 Net cash used in financing activities ( 16,231 ) ( 39,296 ) Effect of exchange rate changes on cash and cash equivalents ( 195 ) ( 468 ) Net decrease in cash and cash equivalents ( 106 ) ( 322 ) Cash and cash equivalents at beginning of period 2,560 2,882 Cash and cash equivalents at end of period $ 2,454 $ 2,560 Supplemental disclosure of cash flow information: Net interest paid $ 4,659 $ 5,454 Net income taxes paid (received) $ 1,628 $ ( 221 ) The accompanying notes are an integral part of these Consolidated Financial Statements. 35 T able of Contents L.B. FOSTER COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, except share data) Common Stock Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Noncontrolling Interest Total Balance, December 31, 2022 $ 111 $ 41,303 $ 123,169 $ ( 6,240 ) $ ( 21,165 ) $ 420 $ 137,598 Net income (loss) — — 1,464 — — ( 165 ) 1,299 Other comprehensive income (loss), net of tax: Pension liability adjustment — — — — 191 — 191 Foreign currency translation adjustment — — — — 2,428 29 2,457 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 — ( 2,371 ) — 2,056 — — ( 315 ) 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 Net income (loss) — — 42,946 — — ( 103 ) 42,843 Other comprehensive income (loss), net of tax: Pension liability adjustment — — — — 1,014 — 1,014 Foreign currency translation adjustment — — — — ( 2,887 ) 77 ( 2,810 ) Unrealized derivative loss on cash flow hedges — — — — ( 593 ) — ( 593 ) Purchase of 300,302 common shares for treasury — — — ( 6,808 ) — — ( 6,808 ) Issuance of 139,799 common shares, net of shares withheld for taxes — ( 3,523 ) — 2,094 — — ( 1,429 ) Stock-based compensation — 3,834 — — — — 3,834 Investment of noncontrolling interest — 128 — — — — 128 Balance, December 31, 2024 $ 111 $ 43,550 $ 167,579 $ ( 11,208 ) $ ( 21,716 ) $ 698 $ 179,014 The accompanying notes are an integral part of these Consolidated Financial Statements. 36 T able of Contents L.B. FOSTER COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share data unless otherwise noted) Note 1. Summary of Significant Accounting Policies Organization, operations, and basis of consolidation The Consolidated Financial Statements include the accounts of L.B. Foster Company and its wholly-owned subsidiaries, joint ventures, and partnerships in which a controlling interest is held. Inter-company transactions and accounts have been eliminated. The Company utilizes the equity method of accounting for companies where its ownership is less than or equal to 50% and significant influence exists. L.B. Foster Company (together with its subsidiaries, the “Company”) is a global technology 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’ most challenging requirements. The Company maintains locations in North America, South America, Europe, and Asia. The Company is organized and operated in two reporting segments: 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 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 . Cougar has been included in the Precast Concrete Products business unit within 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 2025. The grid deck product line is reported in the Bridge Products division 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. 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. The Chemtec business was reported in the Coatings and Measurement division within the Infrastructure segment. Use of estimates 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. Significant accounting policies Cash and cash equivalents 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. Cash and cash equivalents held in non-domestic accounts were $ 1,882 and $ 2,193 as of December 31, 2024 and 2023, respectively. Accounts Receivable Trade receivables are carried at their estimated collectible amounts. Trade credit is generally extended on a short-term basis; thus trade receivables do not bear interest. Credit is extended based upon an evaluation of the customer’s financial condition and, while collateral is not required, the Company periodically receives surety bonds that guarantee payment. Credit terms are consistent with industry standards and practices. Inventory Inventory is valued at the lower of average cost or net realizable value. Slow-moving inventory is reviewed and adjusted regularly, based upon product knowledge, physical inventory observation, inventory turnover, and the age of the inventory. Inventory costs include materials, direct labor, manufacturing overhead, and other direct costs. Property, plant, and equipment Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of 10 to 40 years for buildings and 2 to 50 years for machinery and equipment. Leasehold improvements are amortized over 3 to 19 years, which represent the lives of the respective leases or the lives of the improvements, whichever is shorter. Depreciation expense is recorded within “Cost of goods sold,” “Cost of services sold,” and “Selling and administrative expenses” on the Consolidated Statements of Operations 37 T able of Contents based upon the particular asset’s use. The Company reviews a long-lived asset for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company recognizes an impairment loss if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. There were no material property, plant, and equipment impairments recorded for the years ended December 31, 2024 and 2023. Maintenance, repairs, and minor renewals are charged to operations as incurred. 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 “Cost of goods sold,” “Cost of services sold,” and “Selling and administrative expenses” on the Consolidated Statements of Operations based upon the particular asset’s use. 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, 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 we believe mitigates credit risks. The Company’s reserves are regularly reviewed and revised as necessary. Reserves for uncollectible accounts are recorded as part of “Selling and administrative expenses” in the Consolidated Statements of Operations. 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 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. Goodwill and other intangible assets Goodwill is the cost of an acquisition less the fair value of the identifiable net assets of the acquired business. Goodwill is tested annually for impairment or more often if there are indicators of impairment within a reporting unit. A reporting unit is an operating segment or a component of an operating segment for which discrete financial information is available and reviewed by management on a regular basis. The goodwill impairment test involves comparing the fair value of a reporting unit to its carrying value, including goodwill. When evaluating for impairment the Company may first consider qualitative factors to assess whether there are indicators that it is more likely than not that the fair value of a reporting unit may not exceed its carrying amount. If we do not perform a qualitative assessment, or if we determine that it is more like than not that the fair value of the reporting unit does not exceed its carrying value, we perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying value, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss equal to the excess amount up to the goodwill balance is recorded as a component of operations. The Company's quantitative analysis considers and evaluates each of the three traditional approaches to value: the income approach, the market approach, and the asset approach. The Company uses a combination of a discounted cash flow method and a market approach to determine the fair values of the reporting units. The Company performs its annual impairment tests in the fourth quarter. The Company’s fourth quarter 2024 annual test included the assessment of a qualitative analysis to determine whether it was more likely than not that the fair value of each reporting unit is less than its carrying value and was not required to perform a quantitative assessment. The qualitative assessment considers fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The qualitative assessment considered and evaluated a variety of events or factors that could influence the fair value of the reporting unit, including, but not limited to, actual and projected reporting unit profitability, changes in key personnel, legal and regulatory conditions, industry outlook, macroeconomic conditions, and the reporting units’ competitive position. No impairment was recorded during 2024. 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. The Company reviews a long-lived intangible asset for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. All intangible assets are amortized over their estimated useful lives. Environmental remediation and compliance Environmental remediation costs are accrued when a liability is probable and costs are estimable. Environmental compliance costs, which principally include the disposal of waste generated by routine operations, are expensed as incurred. Reserves are not reduced by potential claims for recovery and are not discounted. Claims for recovery are recognized as agreements are reached with third parties or as amounts are received. Reserves are periodically reviewed throughout the year and adjusted to reflect current remediation progress, prospective estimates of required activity, and other factors that may be relevant, including changes in technology or regulations. Revenue recognition 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 respective 38 T able of Contents 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 the service is rendered. Deferred revenue consists of customer billings or payments received for which the revenue recognition criteria have not yet been met as well as contract liabilities (billings in excess of costs) on over time contracts. Advance payments from customers typically relate to contracts for which the Company has significantly fulfilled its obligations, but due to the Company’s continuing involvement with the project, revenue is precluded from being recognized until the performance obligation is met for the customer. Product warranty The Company maintains a current warranty liability for the repair or replacement of defective products. For certain manufactured products, an accrual is made on a monthly basis as a percentage of cost of sales based upon historical experience. For long-lived construction products, a warranty is established when the claim is known and quantifiable. The product warranty accrual is periodically adjusted based on the identification or resolution of known individual product warranty claims or due to changes in the Company’s historical warranty experience. As of December 31, 2024 and 2023, the product warranty reserve was $ 602 and $ 688 , respectively. Income taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred taxes are measured using enacted tax laws and rates expected to be in effect when such differences are recovered or settled. The effect of a change in tax rates on deferred taxes is recognized in income in the period that includes the enactment date of the change. The Company has also elected to record income taxes associated with global intangible low-taxed income (“GILTI”) as period costs if and when incurred. The Company makes judgments regarding the recognition of deferred tax assets and the future realization of these assets. As prescribed by the FASB’s ASC 740, “Income Taxes” and applicable guidance, valuation allowances must be provided for those deferred tax assets for which it is more likely than not (a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The guidance requires the Company to evaluate positive and negative evidence regarding the recoverability of deferred tax assets. The determination of whether the positive evidence outweighs the negative evidence and quantification of the valuation allowance requires the Company to make estimates and judgments of future financial results. The Company has concluded that for purposes of quantifying valuation allowances, it would be appropriate to consider the reversal of taxable temporary differences related to indefinite-lived intangible assets when assessing the realizability of deferred tax assets that upon reversal, would give rise to operating losses that do not expire. The Company evaluates all tax positions taken on its federal, state, and foreign tax filings to determine if the position is more likely than not to be sustained upon examination. For positions that meet the more likely than not to be sustained criteria, the largest amount of benefit to be realized upon ultimate settlement is determined on a cumulative probability basis. A previously recognized tax position is derecognized when it is subsequently determined that a tax position no longer meets the more likely than not threshold to be sustained. The evaluation of the sustainability of a tax position and the expected tax benefit is based on judgment, historical experience, and various other assumptions. Actual results could differ from those estimates upon subsequent resolution of identified matters. The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. 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 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, 2024 and 2023, foreign currency transaction gain of $ 154 and foreign currency transaction loss of $ 77 , respectively, were included in “Other expense - net” in the Consolidated Statements of Operations. Research and development The Company expenses research and development costs as costs are incurred. For the years ended December 31, 2024 and 2023, research and development expenses were $ 2,831 and $ 2,555 , respectively, and were principally related to the Company’s friction management and railroad monitoring system products within the Rail segment. Recently issued accounting guidance In November 2023, the FASB issued Accounting Standards Update No. 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 Company adopted this guidance for the year ended December 31, 2024 and applied to the guidance retrospectively to all periods presented in the financial statements. The 39 T able of Contents expanded disclosures of the provision of ASU 2023-07 are included in Note 2. ASU 2023-07 affects only disclosures with no impacts to the Company’s financial condition, results of operations, and cash flows. In December 2023, the FASB issued Accounting Standards Update No. 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. Note 2. Business Segments The Company determines its operating segments based on how the Company’s CODM, the Company’s President and Chief Executive Officer, manages the businesses, including resource allocation and operating decisions. The Company is organized into two operating segments, which represent the individual businesses that are run separately within this operational structure. Operating segments are evaluated on their segment operating income contribution to the Company’s consolidated results. 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 has two reportable segments: Rail and Infrastructure. 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 CODM uses segment operating income to determine resources to allocate to each segment (including personnel and financial resources) during the annual budgeting process. The CODM evaluates segment performance regularly by comparing the segment operating income to the budgeted measure. 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, displays, 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 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, located in Spokane, WA. Cash proceeds from the transaction were $ 2,362 , 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 Infrastructure segment consists of the Precast Concrete Products and Steel Products business units. The Precast Concrete Products business unit 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 Company leased a facility in Lake County, Florida in 2024, which will produce precast concrete wall systems when operations commence in 2025. The Steel Products business unit 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 produces bridge forms, which will be a retained business, and products associated with the Bridge Exit which includes bridge decking, bridge railing, structural steel fabrications, and expansion joints. On November 17, 2023, the Company acquired the operating assets of Cougar Mountain Precast, LLC (“Cougar”) which is a licensed manufacturer of Redi-Rock and natural concrete products for $ 1,644 . Cougar has been included in the Precast Concrete Products business unit within the Infrastructure 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 , resulting in a pre-tax loss of $ 2,065 . The Chemtec business was reported in the Steel Products business unit within the Infrastructure segment. On August 30, 2023, the Company announced the Bridge Exit which was reported in the Steel Products business unit within the Infrastructure segment. The decision to exit the bridge grid deck product line was a result of a weak bridge grid deck market condition and outlook due to customer adoption of newer technologies replacing the grid deck solution. The Company continues to operate its bridge forms product line which is a newer technology and not subject to the same challenging market conditions. The Bedford, PA based operations supporting the discontinued bridge grid deck product line expect to complete any remaining customer obligations during 2025. For the years ended December 31, 2024 and 2023, the product line had $ 3,700 and $ 6,146 in sales, respectively. During 2024, the Company incurred an immaterial amount of exit costs, all of which were personnel expenses. During 2023, the Company 40 T able of Contents incurred $ 1,403 of Bridge Exit costs, of which $ 1,141 was recorded in “Cost of goods sold” and $ 262 was recorded in “Selling and administrative expenses.” These expenses included $ 474 in inventory write-downs, $ 667 in personnel related expenses, and $ 262 in other exit costs; the majority of cash payments were made in early 2024. During 2023 the Company also recorded a $ 1,977 reduction in net sales and a $ 3,051 reduction in gross profit stemming from changes in expected value of certain commercial projects associated with the Bridge Exit. Segment operating income includes reportable segment gross profit and direct expenses such as salaries, benefits, restructuring, research and development, professional and purchased services expenditures, amortization expense, bad debt expense, and other segment expenses. Additionally, segment operating income includes allocated corporate operating expenses associated with central services such as quality, logistics, environmental health and safety, information technology, insurance, and human resources. Other corporate functional costs that are associated with the operating segments are also allocated to the segments such as finance, marketing, credit and collections, and treasury functions. Operating expenses related to corporate headquarter functions are 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. Management believes the allocation of corporate operating expenses provides an accurate presentation of how the segments utilize corporate support activities. This provides the CODM meaningful segment profitability information to support operating decisions and the allocation of resources. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies found in Note 1. Certain corporate costs are separately managed on a consolidated basis and are not allocated to the operating segments. These corporate costs include public company costs such as listing fees, audit fees, compliance costs, insurance costs, and Board of Directors fees. Additionally, certain corporate executive management costs, including costs of the corporate executive leadership team, and corporate management stock-based compensation expenses are not allocated to the operating segments. Finally, interest expense, income taxes, and certain other items included in other expense - net, which are managed on a consolidated basis, are not allocated to the operating segments. The operating results of the Company’s reportable segments were as follows as of and for the years ended December 31: 2024 Rail, Technologies, and Services Infrastructure Solutions Total Net sales $ 326,869 $ 203,896 $ 530,765 Less: Cost of sales ( 254,400 ) ( 158,303 ) ( 412,703 ) Selling and administrative employment costs ( 32,002 ) ( 23,868 ) ( 55,870 ) Purchased services (1) ( 7,410 ) ( 6,336 ) ( 13,746 ) General administrative costs (2) ( 7,796 ) ( 4,735 ) ( 12,531 ) Amortization expense ( 3,349 ) ( 1,279 ) ( 4,628 ) Segment operating income $ 21,912 $ 9,375 $ 31,287 Reconciliation of segment operating income Total segment operating income $ 31,287 Gain on sales of former joint venture facility 3,477 Interest expense - net ( 4,992 ) Other expense - net ( 1,076 ) Public company costs ( 5,755 ) Corporate executive management costs ( 5,726 ) Corporate management stock-based compensation ( 2,065 ) Other corporate expenses ( 705 ) Income before income taxes $ 14,445 (1) Purchased services costs include contractor services, insurance expenditures, rental expense, and legal services. (2) General administrative costs generally include office supplies, utilities, advertising, bad debt expense, depreciation and restructuring expenditures. Included in the Rail segment operating income for the year ended December 31, 2024, was a $ 1,134 expense related to restructuring. 41 T able of Contents Included in the Infrastructure segment operating income for the year ended December 31, 2024 was gain on the sale of ancillary property within the Steel Products business unit for total consideration of $ 1,300 generating an $ 815 gain on sale recorded in “Cost of goods sold” and a $ 113 expense related to restructuring. During the year ended December 31, 2024, the Company sold a former joint venture facility located in Magnolia, Texas generating a $ 3,477 gain on sale recorded in “Gain on sale of former joint venture facility” which is included as a component of corporate operating income. 2023 Rail, Technologies, and Services Infrastructure Solutions Total Net sales $ 312,160 $ 231,584 $ 543,744 Less: Cost of sales ( 247,126 ) ( 184,574 ) ( 431,700 ) Selling and administrative employment costs ( 33,181 ) ( 25,007 ) ( 58,188 ) Purchased services (1) ( 7,264 ) ( 6,397 ) ( 13,661 ) General administrative costs (2) ( 9,011 ) ( 4,942 ) ( 13,953 ) Amortization expense ( 3,272 ) ( 2,042 ) ( 5,314 ) Segment operating income $ 12,306 $ 8,622 $ 20,928 Reconciliation of segment operating income Total segment operating income $ 20,928 Interest expense - net ( 5,528 ) Other expense - net ( 2,635 ) Public company costs ( 4,814 ) Corporate executive management costs ( 3,807 ) Corporate management stock-based compensation ( 2,816 ) Other corporate expenses ( 384 ) Income before income taxes $ 944 (1) Purchased services costs include contractor services, insurance expenditures, rental expense, and legal services. (2) General administrative costs generally include office supplies, utilities, advertising, bad debt expense, depreciation and restructuring expenditures. Included in the Rail operating income 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. Included in the Infrastructure segment operating income for the year ended December 31, 2023 were the Bridge Exit costs, as well as the sales and related gross profit impacts of the Bridge Exit. 42 T able of Contents Reconciliations of reportable segment assets, depreciation and amortization, and expenditures for long-lived assets to the Company’s consolidated totals are as follows as of and for the years ended December 31: 2024 Segment Assets Depreciation/Amortization Expenditures for Long-Lived Assets Rail, Technologies, and Services $ 158,859 $ 4,793 $ 2,032 Infrastructure Solutions 123,755 7,417 6,366 Reportable segment total 282,614 12,210 8,398 Corporate 51,936 1,870 1,393 Total $ 334,550 $ 14,080 $ 9,791 2023 Segment Assets Depreciation/Amortization Expenditures for Long-Lived Assets Rail, Technologies, and Services $ 156,638 $ 5,172 $ 1,165 Infrastructure Solutions 130,247 8,262 2,349 Reportable segments total 286,885 13,434 3,514 Corporate 25,516 1,829 999 Total $ 312,401 $ 15,263 $ 4,513 For the year ended December 31, 2024, net sales from one customer of the Rail segment represented approximately $ 71,800 of the Company's consolidated net sales. During 2023, no single customer accounted for more than 10% of the Company’s consolidated net sales. Sales between segments were immaterial and eliminated in consolidation. The following table summarizes the Company’s sales by major geographic region in which the Company had operations for the years ended December 31: 2024 2023 United States $ 454,694 $ 463,936 Canada 22,088 24,925 United Kingdom 44,086 41,418 Other 9,897 13,465 Total net sales $ 530,765 $ 543,744 The following table summarizes the Company’s long-lived assets by geographic region as of December 31: 2024 2023 United States $ 72,899 $ 72,840 Canada 151 56 United Kingdom 1,765 1,833 Other 559 850 Total property, plant, and equipment - net $ 75,374 $ 75,579 43 T able of Contents The following table summarizes the Company’s sales by major product and service line for the years ended December 31: December 31, 2024 2023 Rail Products $ 207,696 $ 205,797 Global Friction Management 65,984 63,946 Technology Services and Solutions 53,189 42,417 Rail, Technologies, and Services 326,869 312,160 Precast Concrete Products 136,043 136,458 Steel Products 67,853 95,126 Infrastructure Solutions 203,896 231,584 Total net sales $ 530,765 $ 543,744 Note 3. Revenue 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 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. A contract’s transaction price is allocated to each distinct performance obligation. The majority of the Company’s contracts have a single performance obligation, as the promise to transfer products or render services is not separately identifiable from other promises in the contract and, therefore, not distinct. 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, 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. Shipping and handling costs are included in cost of goods sold. 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 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. Deferred revenue of $ 10,205 and $ 12,479 as of December 31, 2024 and 2023, respectively, consisted of customer billings or payments received for which the revenue recognition criteria had not yet been met as well as contract liabilities (billings in excess of costs) on over time revenue projects. For the years ended December 31, 2024 and 2023, revenue recognized over time was as follows: Year Ended December 31, Percentage of Total Net Sales Year Ended December 31, 2024 2023 2024 2023 Over time input method $ 52,706 $ 59,864 10.0 % 11.1 % Over time output method 92,548 88,856 17.4 16.3 Total over time sales $ 145,254 $ 148,720 27.4 % 27.4 % Accounting for these long-term agreements involves the use of various techniques to estimate total revenues and costs. The Company estimates profit on these long-term agreements as the difference between total estimated revenues and expected costs to complete a contract and recognizes that profit over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events that may span several years. 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 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. 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 44 T able of Contents 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. The majority of the Company’s revenue is from products transferred and services rendered to customers at a point in time, which is inherent in all major product and service categories. Point in time revenue accounted for 72.6 % of revenue for each of the years ended December 31, 2024 and 2023. 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. 45 T able of Contents For the years ended December 31, 2024 and 2023, net sales by the timing of the transfer of goods and services were as follows: Year Ended December 31, 2024 Rail, Technologies, and Services Infrastructure Solutions Total Point in time $ 263,432 $ 122,079 $ 385,511 Over time 63,437 81,817 145,254 Total net sales $ 326,869 $ 203,896 $ 530,765 Year Ended December 31, 2023 Rail, Technologies, and Services Infrastructure Solutions Total Point in time $ 254,345 $ 140,679 $ 395,024 Over time 57,815 90,905 148,720 Total net sales $ 312,160 $ 231,584 $ 543,744 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. The following table sets forth the Company’s contract assets: Contract Assets Contract asset balance as of December 31, 2023 $ 29,489 Net additions to contract assets 7,490 Transfers from contract asset balance to accounts receivable ( 20,259 ) Contract asset balance as of December 31, 2024 $ 16,720 The following table sets forth the Company’s contract liabilities: Contract Liabilities Contract liability balance as of December 31, 2023 $ 2,189 Revenue recognized from contract liabilities ( 1,410 ) Increase in billings in excess of costs, excluding revenue recognized 1,529 Other adjustments ( 317 ) Balance as of December 31, 2024 $ 1,991 The Company has 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 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. During 2024, the Company recorded $ 2,593 in reductions to net sales stemming from changes in actual and expected values of certain commercial contracts. Such adjustments were $ 8,718 in 2023, including $ 2,987 associated with the Bridge Exit and other settled contracts. See Note 2 for additional information for the Company’s net sales by major product and service category. As of December 31, 2024, the Company had approximately $ 185,909 of remaining performance obligations, which is also referred to as backlog. Approximately 14.2 % of the backlog as of December 31, 2024 was related to projects that are anticipated to extend beyond December 31, 2025. 46 T able of Contents Note 4. Goodwill and Other Intangible Assets As of December 31, 2024 and 2023, the following table represents the goodwill balance by reportable segment: Rail, Technologies, and Services Infrastructure Solutions Total Balance as of December 31, 2022: $ 19,948 $ 10,785 $ 30,733 Acquisitions — 1,336 1,336 Foreign currency translation impact 518 — 518 Balance as of December 31, 2023: 20,466 12,121 32,587 Cougar purchase accounting adjustment — ( 445 ) ( 445 ) Foreign currency translation impact ( 235 ) — ( 235 ) Balance as of December 31, 2024: $ 20,231 $ 11,676 $ 31,907 On November 17, 2023, the Company acquired Cougar Mountain Precast, LLC., for which all purchase accounting adjustments were finalized as of March 31, 2024. Purchase accounting finalization during the three months ended March 31, 2024 included adjustments to record $ 429 of gross intangible assets for customer relationships with a weighted average amortization period of 5 years and other immaterial adjustments. The Company elected to perform a qualitative assessment as an annual test of goodwill impairment in the fourth quarter of 2024 and, as a result of this assessment, the Company determined a quantitative assessment was not necessary and no impairments were recorded in 2024. However, future impairment charges could result if future projections diverge unfavorably from current expectations. As of December 31, 2024 and 2023, the components of the Company’s intangible assets were as follows: December 31, 2024 Weighted Average Amortization Period In Years Gross Carrying Value Accumulated Amortization Net Carrying Amount Patents 10 $ 308 $ ( 198 ) $ 110 Customer relationships 13 28,006 ( 19,958 ) 8,048 Trademarks and trade names 13 7,974 ( 5,219 ) 2,755 Technology 9 32,616 ( 28,923 ) 3,693 Favorable lease 6 327 ( 132 ) 195 $ 69,231 $ ( 54,430 ) $ 14,801 December 31, 2023 Weighted Average Amortization Period In Years Gross Carrying Value Accumulated Amortization Net Carrying Amount Patents 10 $ 335 $ ( 199 ) $ 136 Customer relationships 16 27,712 ( 17,236 ) 10,476 Trademarks and trade names 16 7,989 ( 4,593 ) 3,396 Technology 9 32,658 ( 27,906 ) 4,752 Favorable lease 6 327 ( 77 ) 250 $ 69,021 $ ( 50,011 ) $ 19,010 Intangible assets are amortized over their useful lives ranging from 3 to 25 years, with a total weighted average amortization period of approximately 11 years. Amortization expense for the years ended December 31, 2024 and 2023 were $ 4,628 and $ 5,314 , 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. 47 T able of Contents Estimated annual amortization expense for the years ending December 31, 2025 and thereafter is as follows: Year Ending December 31, 2025 $ 2,957 2026 2,425 2027 2,107 2028 1,549 2029 1,158 2030 and thereafter 4,605 $ 14,801 Note 5. Accounts Receivable Accounts receivable as of December 31, 2024 and 2023 are summarized as follows: December 31, 2024 2023 Accounts receivable $ 66,105 $ 54,293 Allowance for credit losses ( 1,127 ) ( 809 ) Accounts receivable - net $ 64,978 $ 53,484 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 $ 365 and $ 1,912 for the years ended December 31, 2024 and 2023, respectively. The changes in reserves for uncollectible accounts are net of recoveries of previous write-offs of $ 335 for the year ended December 31, 2024. 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 we believe mitigates credit risks. The Company’s reserves are regularly reviewed and revised as necessary. The following table sets forth the Company’s allowance for credit losses: Allowance for Credit Losses December 31, 2023 $ 809 Additions to the current period provision 700 Write-off against allowance ( 47 ) Recoveries of previous write-offs ( 335 ) December 31, 2024 $ 1,127 Note 6. Inventory Inventory is valued at average cost or net realizable value, whichever is lower. The Company’s components of inventory as of December 31, 2024 and 2023 are summarized in the following table: December 31, 2024 2023 Finished goods $ 37,238 $ 44,518 Work-in-process 6,717 4,675 Raw materials 26,551 23,918 Inventories - net $ 70,506 $ 73,111 48 T able of Contents Note 7. Property, Plant, and Equipment Property, plant, and equipment as of December 31, 2024 and 2023 consisted of the following: December 31, 2024 2023 Land $ 5,864 $ 5,869 Improvements to land and leaseholds 19,566 19,404 Buildings 31,703 31,447 Machinery and equipment, including equipment under finance leases 117,377 118,190 Construction in progress 4,415 1,702 Gross property, plant, and equipment 178,925 176,612 Less: accumulated depreciation and amortization, including accumulated amortization of finance leases ( 103,551 ) ( 101,033 ) Property, plant, and equipment - net $ 75,374 $ 75,579 Depreciation expense, including amortization of assets under finance leases, for the years ended December 31, 2024 and 2023 amounted to $ 9,452 and $ 9,949 , respectively. There were no material property, plant, and equipment impairments recorded for the year ended December 31, 2024 and 2023. Note 8. Leases The Company determines if an arrangement is a lease at its inception. Operating leases are included in “Operating lease right-of-use assets,” “Other accrued liabilities,” and “Long-term operating lease liabilities” within the Consolidated Balance Sheets. Finance leases are included in “Property, plant, and equipment - net,” “Current maturities of long-term debt,” and “Long-term debt” in the Consolidated Balance Sheets. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. 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. The Company uses the implicit rate when readily determinable. The operating lease right-of-use asset also includes indirect costs incurred and lease payments made prior to the commencement date, less any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease and will be recognized when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components that it accounts for as a single lease component. Also, for certain equipment leases, the Company applies a portfolio approach to effectively account for the operating lease right-of-use assets and liabilities. The Company has operating and finance leases for manufacturing facilities, corporate offices, sales offices, vehicles, and certain equipment. As of December 31, 2024, its leases had remaining lease terms of 1 to 10 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 leases were as follows as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Operating leases Operating lease right-of-use assets $ 18,480 $ 14,905 Other accrued liabilities $ 3,771 $ 3,040 Long-term operating lease liabilities 14,709 11,865 Total operating lease liabilities $ 18,480 $ 14,905 Finance leases Property, plant, and equipment $ 1,545 $ 1,317 Accumulated amortization ( 1,072 ) ( 1,104 ) Property, plant, and equipment - net $ 473 $ 213 Current maturities of long-term debt $ 167 $ 102 Long-term debt 306 111 Total finance lease liabilities $ 473 $ 213 49 T able of Contents The components of lease expense within the Consolidated Statements of Operations were as follows for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Finance lease cost: Amortization of finance leases $ 160 $ 186 Interest on lease liabilities 43 58 Operating lease cost 3,181 3,448 Sublease income ( 200 ) ( 200 ) Total lease cost $ 3,184 $ 3,492 The cash flow components of the leases were as follows for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ ( 3,746 ) $ ( 4,113 ) Financing cash flows from finance leases ( 212 ) ( 214 ) Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 6,605 $ 404 The weighted-average remaining lease term (in years) and discount rate related to the operating leases were as follows for the periods presented: December 31, 2024 2023 Operating lease weighted-average remaining lease term 6 6 Operating lease weighted-average discount rate 5.5 % 5.2 % Finance lease weighted-average remaining lease term 4 2 Finance lease weighted-average discount rate 4.8 % 3.6 % As of December 31, 2024, estimated annual maturities of lease liabilities for the year ending December 31, 2025 and thereafter were as follows: Year Ending December 31, Operating Leases Finance Leases 2025 $ 4,589 $ 197 2026 4,526 126 2027 3,607 66 2028 3,151 65 2029 2,750 65 2030 and thereafter 2,417 60 21,040 579 Interest ( 2,560 ) ( 106 ) Total $ 18,480 $ 473 50 T able of Contents Note 9. Long-Term Debt and Related Matters Long-term debt as of December 31, 2024 and 2023 consisted of the following: December 31, 2024 2023 Revolving credit facility with an interest rate of 6.38 % as of December 31, 2024 and 7.40 % as of December 31, 2023 $ 46,467 $ 55,060 Lease obligations payable in installments through 2024 with a weighted average interest rate of 4.80 % as of December 31, 2024 and 4.67 % as of December 31, 2023 473 213 Total debt 46,940 55,273 Less: current maturities ( 167 ) ( 102 ) Long-term portion $ 46,773 $ 55,171 The expected maturities of long-term debt for December 31, 2025 and thereafter are as follows: Year Ending December 31, 2025 $ 167 2026 46,577 2027 51 2028 50 2029 50 2030 and thereafter 45 Total $ 46,940 Borrowings On August 13, 2021, the Company, its domestic subsidiaries, and certain of its Canadian and United Kingdom subsidiaries (collectively, the “Borrowers”), entered into the Fourth Amended and Restated Credit Agreement (the “Credit Agreement”) with PNC Bank, N.A., Citizens Bank, N.A., Wells Fargo Bank, National Association, Bank of America, N.A., and BMO Harris Bank, National Association. The Credit Agreement, as amended, modifies the prior amended revolving credit facility, on terms more favorable to the Company and extends the maturity 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 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. On August 12, 2022, the Company entered into a second amendment to its Credit Agreement (the “Second Amendment”) which added an additional tier to the pricing grid and provided for the conversion from LIBOR-based to SOFR-based borrowings. Borrowings under the Credit Agreement, as amended, will bear interest at rates based upon either the base rate or SOFR rate plus applicable margins. 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 (as defined in the Credit Agreement), and (ii) 3.50 to 1.00 for all testing periods occurring during an Acquisition Period, 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. As of December 31, 2024 and 2023, the Company was in compliance with the covenants in the Credit Agreement, as amended. As of December 31, 2024 and 2023, the Company had outstanding letters of credit of approximately $ 1,409 and $ 2,807 , respectively, and had net available borrowing capacity of $ 82,124 and $ 72,133 , respectively, subject to covenant restrictions. The maturity date of the facility is August 13, 2026. Note 10. Stockholders’ Equity The Company had authorized shares of 20,000,000 in common stock with 11,115,779 shares issued as of December 31, 2024 and 2023. The common stock has a par value of $ 0.01 per share and the Company did not make any dividend payments during the years ended December 31, 2024 and 2023. As of December 31, 2024 and 2023, the Company withheld 59,577 and 24,886 shares for approximately $ 1,429 and $ 315 , respectively, from employees to pay their withholding taxes in connection with the vesting of restricted stock awards. 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. Repurchases of shares of the Company’s common stock may be made from time to time in the open market or in such other manner as determined by the Company. The timing of the repurchases and the actual amount repurchased will depend 51 T able of Contents on a variety of factors, including the market price of the Company’s shares, general market and economic conditions, and other factors. The stock repurchase program does not obligate the Company to acquire any particular amount of common stock and may be suspended or discontinued at any time. On August 5, 2024, the Board of Directors approved the modification of the Company’s stock repurchase program. The modifications include revising the repurchase program expiration date from February 2026 to February 2025. Additionally, the Board of Directors removed the restriction which previously limited repurchases to $ 5,000 in any trailing 12-month period. The authorized repurchase amount was unchanged at $ 15,000 . In connection with the stock repurchase program, 300,302 shares valued at $ 6,808 were repurchased during the year ended December 31, 2024 and 134,208 shares valued at $ 2,310 were repurchased during the year ended December 31, 2023. There were no dividends declared during the years ended December 31, 2024 and 2023. On March 3, 2025, the Company's Board of Directors authorized the repurchase of up to $ 40,000 of the Company's common stock in open market transactions and/or 10b5-1 trading plans through February 29, 2028, as discussed in Note 20. Common Stock Treasury Outstanding (Number of Shares) Balance at end of 2022 338,952 10,776,827 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 Issued for stock-based compensation plans ( 139,799 ) 139,799 Repurchased common stock 300,302 ( 300,302 ) Balance at end of 2024 542,347 10,573,432 Note 11. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, net of tax, for the years ended December 31, 2024 and 2023, were as follows: December 31, 2024 2023 Pension and post-retirement benefit plan adjustments $ 93 $ ( 921 ) Unrealized income on interest rate swap contracts 685 1,278 Foreign currency translation adjustments ( 22,494 ) ( 19,607 ) Accumulated other comprehensive loss $ ( 21,716 ) $ ( 19,250 ) During the year ended December 31, 2024, the Company reclassified $ 1,174 of pension and post-retirement benefit plan adjustments from “Accumulated other comprehensive loss” to “Other expense - net” as a result of the termination our frozen L.B. Foster Company Merged Retirement Plan, discussed further in Note 16. Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-US subsidiaries. See Note 13 for further information. 52 T able of Contents Note 12. Earnings Per Common Share (Share amounts in thousands) The following table sets forth the computation of basic and diluted earnings per common share for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Numerator for basic and diluted earnings per common share: Net income attributable to L.B. Foster Company $ 42,946 $ 1,464 Denominator: Weighted average shares outstanding 10,721 10,799 Denominator for basic earnings per common share 10,721 10,799 Effect of dilutive securities: Stock compensation plans 327 196 Dilutive potential common shares 327 196 Denominator for diluted earnings per common share - adjusted weighted average shares outstanding and assumed conversions 11,048 10,995 Basic earnings per common share $ 4.01 $ 0.14 Diluted earnings per common share $ 3.89 $ 0.13 Note 13. Income Taxes Income before income taxes, as shown in the accompanying Consolidated Statements of Operations, includes the following components for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Domestic $ 21,200 $ 14,575 Foreign ( 6,755 ) ( 13,631 ) Income before income taxes $ 14,445 $ 944 Significant components of the provision for income taxes for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, 2024 2023 Current: Federal $ — $ ( 16 ) State 2 53 Foreign 745 1,460 Total current 747 1,497 Deferred: Federal ( 21,441 ) — State ( 7,691 ) — Foreign ( 13 ) ( 1,852 ) Total deferred ( 29,145 ) ( 1,852 ) Total income tax (benefit) expense $ ( 28,398 ) $ ( 355 ) 53 T able of Contents The reconciliation of income tax computed at statutory rates to income tax expense for the years ended December 31, 2024 and 2023 is as follows: Year Ended December 31, 2024 2023 Amount Percent Amount Percent Statutory rate $ 3,033 21.0 % $ 198 21.0 % Foreign tax rate differential ( 249 ) ( 1.7 ) ( 520 ) ( 55.1 ) State income taxes, net of federal benefit 772 5.3 322 34.1 Non-deductible expenses 221 1.5 206 21.8 Non-deductible executive compensation 400 2.8 256 27.1 Income tax credits ( 164 ) ( 1.1 ) ( 218 ) ( 23.1 ) Change in income tax rates ( 229 ) ( 1.6 ) ( 38 ) ( 4.0 ) Tax on unremitted foreign earnings 148 1.0 181 19.2 Change in valuation allowance ( 31,937 ) ( 221.1 ) ( 723 ) ( 76.6 ) Other ( 393 ) ( 2.7 ) ( 19 ) ( 2.0 ) Total income tax (benefit) expense / effective rate $ ( 28,398 ) ( 196.6 ) % $ ( 355 ) ( 37.6 ) % Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2024 and 2023 were as follows: December 31, 2024 2023 Deferred tax assets: Goodwill and other intangibles $ 1,224 $ 1,762 Accrued settlement — 2,001 Deferred compensation 3,885 4,127 Contingent liabilities 448 600 Net operating loss / tax credit carryforwards 35,431 36,217 Pension and post-retirement liability — 149 Inventories 1,082 852 Warranty reserve 138 146 Accounts receivable 265 201 Interest deduction carryforward 1,444 1,882 Capitalized research expenditures 1,882 1,599 Other 453 680 Total deferred tax assets 46,252 50,216 Less: valuation allowance ( 8,223 ) ( 40,125 ) Net deferred tax assets 38,029 10,091 Deferred tax liabilities: Goodwill and other intangibles ( 1,472 ) ( 2,181 ) Depreciation ( 7,845 ) ( 8,596 ) Pension and post-retirement liability ( 410 ) — Unrealized income on interest rate swap contracts ( 110 ) ( 306 ) Unremitted earnings of foreign subsidiaries ( 195 ) ( 50 ) Other ( 247 ) ( 190 ) Total deferred tax liabilities ( 10,279 ) ( 11,323 ) Net deferred tax (liabilities) assets $ 27,750 $ ( 1,232 ) 54 T able of Contents A valuation allowance is required to be established or maintained when, based on currently available information and other factors, it is more likely than not that all or a portion of a deferred tax asset will not be realized. The Company has considered all available evidence, both positive and negative, in assessing the need for a valuation allowance in each jurisdiction. During 2024, the Company reversed $ 34,210 of its valuation allowance previously recorded against certain U.S. federal and state deferred tax assets. The positive evidence considered in evaluating U.S. federal and state deferred tax assets included the Company's cumulative financial income position over the previous three years, as well as the composition and reversal patterns of existing taxable and deductible temporary differences between financial reporting and tax. Based on our evaluation, the Company believed it was appropriate to rely on forecasted future taxable income to support its U.S. federal and state deferred tax assets. The amount of deferred tax assets considered realizable, however, could be adjusted if negative evidence outweighs additional subjective evidence such as the Company's projections for growth. As of December 31, 2024, the Company had a federal Net Operating Loss (“NOL”) carryforward of $ 93,344 , which is limited to 80% of taxable income annually, but may be carried forward indefinitely. The Company also has federal research tax credit carryforwards in the amount of $ 1,228 that will expire at various times from 2036 through 2044. Based on information available as of December 31, 2024, the Company believes it is more likely than not that the tax benefits from the federal loss carryforwards and research tax credit carryforwards will be realized. As of December 31, 2024 and 2023, the tax benefit of NOL carryforwards available for state income tax purposes was $ 9,802 and $ 10,137 , respectively. Many state NOL carryforwards will expire in various years through 2044, while some may be carried forward indefinitely. Based on information available as of December 31, 2024, the Company believes it is more likely than not that a portion of the tax benefit from state operating loss carryforwards will not be realized. In recognition of this risk, the Company has provided a valuation allowance of $ 2,153 against deferred tax assets related to state operating loss carryforwards as of December 31, 2024. As of December 31, 2024, the Company has NOL carryforwards in certain foreign jurisdictions of $ 26,346 , which may be carried forward indefinitely. The foreign jurisdictions have incurred cumulative financial losses over the three-year period ended December 31, 2024 and have projected future taxable losses. Based on information available as of December 31, 2024, 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 $ 6,070 , collectively, against deferred tax assets in foreign jurisdictions as of December 31, 2024. The determination to record or not record a valuation allowance involves management's judgment, based on the consideration of positive and negative evidence available at the time of the assessment. Management will continue to assess the realization of its deferred tax assets based upon future evidence, and may record adjustments to valuation allowances against deferred tax assets in future periods, as appropriate, that could materially impact net income. Each quarter, management reviews operations and liquidity needs in each jurisdiction to assess the Company’s intent to reinvest foreign earnings outside of the United States. As of December 31, 2024, management determined that a portion of the Company’s outside basis differences in its foreign subsidiaries would not be indefinitely reinvested outside of the United States. The Company has accrued foreign withholding taxes of $ 195 related to $ 3,900 of outside basis differences in its foreign subsidiaries that are not indefinitely reinvested as of December 31, 2024. It is management’s intent and practice to indefinitely reinvest all other undistributed earnings outside of the United States. Determination of the amount of any unrecognized deferred income tax liability associated with these undistributed earnings is not practicable because of the complexities of the hypothetical calculation. The following table provides a reconciliation of unrecognized tax benefits as of December 31, 2024 and 2023: December 31, 2024 2023 Unrecognized tax benefits at beginning of period: $ 307 $ 354 Decreases based on tax positions for prior periods ( 42 ) ( 47 ) Balance at end of period $ 265 $ 307 The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $ 265 as of December 31, 2024. The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. As of December 31, 2024 and 2023, the Company had accrued interest and penalties related to unrecognized tax benefits of $ 294 and $ 332 , respectively. As of December 31, 2024, the Company did not expect any material increases or decreases to its unrecognized tax benefits within the next 12 months. 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 US and in various state, local, and foreign jurisdictions. The Company is subject to federal income tax examinations for the 2021 period and thereafter. With respect to the state, local, and foreign filings, certain entities of the Company are subject to income tax examinations for the 2020 period and thereafter. 55 T able of Contents Note 14. Stock-based Compensation The Company applies the provisions of ASC 718, “Compensation - Stock-based Compensation,” to account for the Company’s stock-based compensation. 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 period. Stock forfeitures and cancellations are recognized as they occur. The Company recorded stock-based compensation expense of $ 3,834 and $ 4,179 for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, unrecognized compensation expense for awards that the Company expects to vest approximated $ 5,154 . The Company will recognize this unrecognized compensation expense over approximately 2.2 years through February 13, 2027. Shares issued as a result of vested stock-based compensation generally will be from previously issued shares that have been reacquired by the Company and held as treasury stock or authorized but previously unissued common stock. As of December 31, 2024, the Company had stock awards issued pursuant to the 2022 Equity and Incentive Compensation Plan (the “Equity and Incentive Compensation Plan”) and its predecessor, the 2006 Omnibus Incentive Compensation Plan (the “Omnibus Plan”). The Omnibus Plan allowed for the issuance of 2,058,000 shares of common stock through the granting of stock options or stock awards (including performance units convertible into stock) to key employees and directors at no less than 100% of fair market value on the date of the grant. The Equity and Incentive Compensation Plan allows for the issuance of 1,924,077 shares of common stock, which includes 1,835,000 shares that were authorized under the Equity and Incentive Compensation Plan and 89,077 shares remaining available for the Omnibus Incentive Plan, through the granting of stock options or stock awards (including performance units and restricted stock units convertible into stock) to key employees and directors at no less than 100% of fair market value on the date of the grant. The total number of shares of common stock available for issuance, including shares that were forfeited, cancelled, expired, settled for cash, or unearned under the Omnibus Plan, were available for awards under the Equity and Incentive Compensation Plan as of its approval date. The Omnibus Plan and Equity and Incentive Compensation Plan provide for the granting of “nonqualified options” with a duration of not more than ten years from the date of grant. The Omnibus Plan and Equity and Incentive Compensation Plan also provide that, unless otherwise set forth in the option agreement, stock options are exercisable in installments of up to 25 % annually beginning one year from the date of grant. No stock options have been granted under the Omnibus Plan or Equity and Incentive Compensation Plan and, as such, there was no stock-based compensation expense related to stock options recorded in 2024 and 2023. Non-Employee Director Fully-Vested and Restricted Stock Awards 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. 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 into deferred stock units. Non-Employee directors may elect to receive quarterly cash compensation in the form of fully-vested stock. During 2024, a Board member has elected to receive fully vested stock in lieu of cash compensation. During 2024 and 2023, the non-employee directors were granted a total of 22,458 and 39,312 restricted shares, respectively. Compensation expense recorded by the Company related to such awards to non-employee directors was approximately $ 589 and $ 468 for the years ended December 31, 2024 and 2023, respectively. During 2024, 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 $ 27.45 and $ 13.00 per share for the years ended December 31, 2024 and 2023, respectively. Restricted Stock and Performance-Based Stock and Share Units Under the Equity and Incentive Compensation Plan and Omnibus Plan, the Company grants certain employees restricted stock and performance-based stock and 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. Performance unit awards are offered annually under separate three-year long-term incentive programs, unless indicated otherwise by the underlying performance unit award agreement. Performance units are subject to forfeiture and will be converted into common stock based upon the Company’s performance relative to performance measures and conversion multiples as defined in the underlying program. If the Company’s estimate of the number of performance stock awards expected to vest changes in a subsequent accounting period, cumulative compensation expense could increase or decrease. The change is recognized in the current period for the performance unit awards and would change future expense over the remaining service period. 56 T able of Contents The following table summarizes the restricted stock award, deferred stock units, and performance unit award activity for the years ended December 31, 2024 and 2023: Restricted Stock Deferred Stock Units Performance Stock Units Weighted Average Aggregate Grant Date Fair Value Outstanding as of December 31, 2022 174,173 46,268 108,478 $ 17.77 Granted 181,914 — 367,558 11.78 Vested ( 88,367 ) ( 33,864 ) — 15.97 Net adjustment for incentive awards — — 84,302 13.75 Canceled and forfeited ( 2,750 ) — — 14.46 Outstanding as of December 31, 2023 264,970 12,404 560,338 14.10 Granted 90,807 — 86,772 24.69 Vested ( 148,808 ) ( 12,404 ) ( 29,778 ) 14.51 Net adjustment for incentive awards — — ( 82,374 ) 17.46 Canceled and forfeited ( 3,417 ) — ( 437 ) 14.43 Outstanding as of December 31, 2024 203,552 — 534,521 $ 16.31 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. Performance Stock Units are adjusted to the Company’s expected performance target attainment, while the weighted average aggregate grant date fair value in the above table is based upon achieving 100% of the performance targets as defined in the underlying plan. In June 2022, under the Equity and Incentive Compensation 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 for the projected payout. 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. Under this five-year program, participants have the opportunity to earn up to 3,333 shares of Company common stock. The first 50 % of the shares ( 1,666 shares) are earned based on achievement of a consecutive thirty (30) day average Nasdaq closing price of $ 25.00 . 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 for the projected payout. The program and opportunity to earn the shares expires on February 28, 2026. Excluding the restricted stock awards granted to non-employee directors, the Company recorded stock-based compensation expense of $ 3,245 and $ 3,711 , respectively, for the periods ended December 31, 2024 and 2023 related to restricted stock and performance unit awards. Note 15. Fair Value Measurements The Company determines the fair value of assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The fair values are based on assumptions that market participants would use when pricing an asset or liability, including assumptions about risk and the risks inherent in valuation techniques and the inputs to valuations. The fair value hierarchy is based on whether the inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s own assumptions of what market participants would use. The fair value hierarchy includes three levels of inputs that may be used to measure fair value as described below. Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The classification of a financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. 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 and expiring March 1, 2025 and August 13, 2026, respectively. The fair value of the interest rate swaps is based on market-observable forward interest rates and represents the estimated amount that the Company would 57 T able of Contents pay to terminate the agreements. As such, the swap agreements are classified as Level 2 within the fair value hierarchy. As of December 31, 2024 and December 31, 2023, 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 Consolidated Balance Sheets. Fair Value Measurements as of December 31, 2024 Fair Value Measurements as of December 31, 2023 December 31, 2024 Level 1 Level 2 Level 3 December 31, 2023 Level 1 Level 2 Level 3 Interest rate swaps $ 430 $ — $ 430 $ — $ 1,225 $ — $ 1,225 $ — Total assets $ 430 $ — $ 430 $ — $ 1,225 $ — $ 1,225 $ — The $ 20,000 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 Consolidated Balance Sheets and included in “Interest expense - net” in our Consolidated Statements of Operations as the interest expense from our debt is recognized. For the years ended December 31, 2024 and 2023, the Company recognized interest income of $ 1,306 and $ 1,206 , respectively, from interest rate swaps. 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. The gross carrying value of the Company’s revolving credit facility approximates fair value for the periods presented. Additional information regarding the revolving credit facility can be found in Note 9. Information regarding the fair value disclosures associated with the assets of the Company’s defined benefit plans can be found in Note 16. Note 16. Retirement Plans The Company provides retirement plans that cover its hourly and salaried employees. In the US, as of December 31, 2024 the Company has two defined contribution plans. Employees are eligible to participate in the appropriate plan based on employment classification. The Company's contributions to the defined contribution plans are governed by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the Company’s policy and investment guidelines of the applicable plan. The Company’s policy is to contribute at least the required minimum in accordance with the funding standards of ERISA. The Company maintains one defined contribution plans for its employees in Canada. In the United Kingdom, the Company maintains two defined contribution plans and a defined benefit plan, which is frozen. These plans are discussed in further detail below. On May 23, 2024, the Company's Board of Directors approved the termination of the frozen L.B. Foster Company Merged Retirement Plan (the “US DB Plan”) and the Portec Rail Products (UK) Limited Pension Scheme (the “UK DB Plan”). At such time, the Company notified all plan participants of the Company's intentions to terminate and fully settle the obligations. United States Defined Benefit Plan During the fourth quarter of 2024, the Company completed the termination of the US DB Plan by distributing all the assets of its US DB Plan and by making additional cash contributions of $ 1,806 to effectuate the termination of this plan. The settlement of these obligations resulted in the recognition of a charge of $ 1,722 which has been presented as a component of “Other expense - net” for the year ended December 31, 2024. 58 T able of Contents The following tables present a reconciliation of the changes in the benefit obligation, the fair market value of the assets, and the funded status of the plan, as of December 31, 2024 and 2023: December 31, 2024 2023 Changes in benefit obligation: Benefit obligation at beginning of year $ 5,909 $ 6,101 Service cost — — Interest cost 265 286 Actuarial gain ( 150 ) ( 23 ) Benefits paid ( 432 ) ( 455 ) Settlements ( 5,592 ) — Benefit obligation at end of year $ — $ 5,909 Change to plan assets: Fair value of assets at beginning of year $ 3,923 $ 3,792 Actual gain (loss) on plan assets ( 61 ) 310 Employer contribution 2,274 276 Benefits paid ( 432 ) ( 455 ) Reversion ( 112 ) Settlements ( 5,592 ) — Fair value of assets at end of year — 3,923 Funded status at end of year $ — $ ( 1,986 ) Amounts recognized in the consolidated balance sheets consist of: Other long-term liabilities $ — $ ( 1,986 ) Amounts recognized in accumulated other comprehensive loss consist of: Net loss $ — $ 1,598 Net periodic pension costs for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, 2024 2023 Components of net periodic benefit cost: Interest cost $ 265 $ 286 Expected return on plan assets ( 271 ) ( 256 ) Recognized net actuarial loss 58 62 Net periodic pension cost $ 52 $ 92 Settlement charge 1,722 — Total pension expense $ 1,774 $ 92 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. Year Ended December 31, 2024 2023 Discount rate 4.7 % 4.9 % Expected rate of return on plan assets 7.0 % 7.0 % The expected long-term rate of return is based on numerous factors, including the target asset allocation for plan assets, historical rate of return, long-term inflation assumptions, and current and projected market conditions. 59 T able of Contents Amounts applicable to the Company’s pension plan with accumulated benefit obligations in excess of plan assets were as follows as of December 31, 2023: December 31, 2023 Projected benefit obligation $ 5,909 Accumulated benefit obligation 5,909 Fair value of plan assets 3,923 Plan assets consist primarily of various fixed income and equity investments. The Company’s primary investment objective is to provide long-term growth of capital while accepting a moderate level of risk. The investments are limited to cash and cash equivalents, bonds, preferred stocks, and common stocks. The investment target ranges and actual allocation of pension plan assets by major category as of December 31, 2023 were as follows: December 31, Target 2023 Asset Category Cash and cash equivalents 0 - 20 % 4 % Total fixed income funds 25 - 50 % 33 Total mutual funds and equities 35 - 70 % 63 Total 100 % In accordance with the fair value disclosure requirements of ASC 820, the following assets were measured at fair value on a recurring basis as of December 31, 2023. Additional information regarding ASC 820 and the fair value hierarchy can be found in Note 15. December 31, 2023 Asset Category Cash and cash equivalents $ 160 Fixed income funds Corporate bonds 845 Total fixed income funds 845 Equity funds and equities Mutual funds — Exchange-traded funds 2,918 Total mutual funds and equities 2,918 Total $ 3,923 Cash equivalents: The Company uses quoted market prices to determine the fair value of these investments in interest-bearing cash accounts and they are classified as Level 1 of the fair value hierarchy. The carrying amounts approximate fair value because of the short maturity of the instruments. Fixed income funds: Investments within the fixed income funds category consist of fixed income corporate debt. The Company uses quoted market prices to determine the fair values of these fixed income funds. These instruments consist of exchange-traded government and corporate bonds and are classified as Level 1 of the fair value hierarchy. Equity funds and equities: The valuation of investments in registered investment companies is based on the underlying investments in securities. Securities traded on security exchanges are valued at the latest quoted sales price. Securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the average of the last reported bid and ask quotations. These investments are classified as Level 1 of the fair value hierarchy. United Kingdom Defined Benefit Plan 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. Benefits under the plan were based on years of service and eligible compensation during defined periods of service. The Company’s funding policy for the plan is to make minimum annual contributions required by applicable regulations. The UK DB Plan is fully funded as of December 31, 2024. 60 T able of Contents The funded status of the United Kingdom defined benefit plan as of December 31, 2024 and 2023 was as follows: December 31, 2024 2023 Changes in benefit obligation: Benefit obligation at beginning of year $ 5,011 $ 4,671 Interest cost 215 229 Actuarial gain ( 134 ) 154 Benefits paid ( 322 ) ( 292 ) Foreign currency exchange rate changes ( 66 ) 249 Benefit obligation at end of year $ 4,704 $ 5,011 Change to plan assets: Fair value of assets at beginning of year $ 6,399 $ 5,745 Actual gain (loss) on plan assets 137 323 Employer contribution 214 318 Benefits paid ( 322 ) ( 292 ) Foreign currency exchange rate changes ( 83 ) 305 Fair value of assets at end of year 6,345 6,399 Funded status at end of year $ 1,641 $ 1,388 Amounts recognized in the consolidated balance sheets consist of: Other assets $ 1,641 $ 1,388 Amounts recognized in accumulated other comprehensive loss consist of: Net gain $ ( 703 ) $ ( 567 ) Prior service cost 46 71 Total $ ( 657 ) $ ( 496 ) The Company's UK DB Plan is fully funded as of December 31, 2024. In January 2025, the Company entered into an insurance buy-in contract with a third party insurer which resulted in an exchange of plan assets for an annuity that covers our future projected benefit obligations. The Company expects the buy out of the plan and transfer of future benefit obligations of plan participants to be completed in early 2026. The Company does not expect to make any further contributions to the UK DB Plan. Net periodic pension costs for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, 2024 2023 Components of net periodic benefit gain: Interest cost $ 215 $ 229 Expected return on plan assets ( 380 ) ( 346 ) Amortization of prior service cost 24 24 Recognized net actuarial loss 33 18 Net periodic pension gain $ ( 108 ) $ ( 75 ) 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. Year Ended December 31, 2024 2023 Discount rate 5.4 % 4.5 % Expected rate of return on plan assets 5.3 % 6.0 % 61 T able of Contents Amounts applicable to the Company’s pension plans with accumulated benefit obligations in excess of plan assets were as follows as of December 31, 2024 and 2023: December 31, 2024 2023 Projected benefit obligation $ 4,704 $ 5,011 Accumulated benefit obligation 4,704 5,011 Fair value of plan assets 6,345 6,399 The Company has estimated the long-term rate of return on plan assets based primarily on historical returns on plan assets, adjusted for changes in target portfolio allocations, and recent changes in long-term interest rates based on publicly available information. Plan assets are invested by the trustees in accordance with a written statement of investment principles. This statement permits investment in equities, corporate bonds, United Kingdom government securities, commercial property, and cash, based on certain target allocation percentages. Asset allocation is primarily based on a strategy to provide steady growth without undue fluctuations. The target asset allocation percentages for 2024 were as follows: Equity securities Up to 100 % Commercial property Not to exceed 50 % UK Government securities Not to exceed 50 % Cash Up to 100 % Plan assets held within the United Kingdom defined benefit plan consist of cash and equity securities that have been classified as Level 1 of the fair value hierarchy. All other plan assets have been classified as Level 2 of the fair value hierarchy. The plan assets by category for the years ended December 31, 2024 and 2023 were as follows: December 31, 2024 2023 Asset Category Cash and cash equivalents $ 139 $ 127 Equity securities — 3,676 Bonds 6,206 1,693 Other — 903 Total $ 6,345 $ 6,399 United Kingdom regulations require trustees to adopt a prudent approach to funding required contributions to defined benefit pension plans. The UK DB Plan expects to make $ 336 of benefit payments in 2025 prior to the termination of the plan in early 2026. Defined Contribution Plans 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. Year Ended December 31, 2024 2023 United States $ 2,757 $ 2,841 Canada 124 114 United Kingdom 1,165 1,178 $ 4,046 $ 4,133 Note 17. Commitments and Contingent Liabilities The Company is subject to product warranty claims that arise in the ordinary course of its business. For certain manufactured products, the Company maintains a product warranty accrual, which is adjusted on a monthly basis as a percentage of cost of sales. In addition, the product warranty accrual is adjusted periodically based on the identification or resolution of known individual product warranty claims. 62 T able of Contents The following table sets forth the Company’s product warranty accrual: Warranty Liability Balance as of December 31, 2023 $ 688 Additions to warranty liability 397 Warranty liability utilized ( 483 ) Balance as of December 31, 2024 $ 602 On March 13, 2019, the Company and its subsidiary, CXT Incorporated (“CXT”), entered into a Settlement Agreement (the “Settlement Agreement”) with Union Pacific Railroad Company (“UPRR”) to resolve the pending litigation in the matter of Union Pacific Railroad Company v. L.B. Foster Company and CXT Incorporated , Case No. CI 15-564, in the District Court for Douglas County, Nebraska. Under the Settlement Agreement, the Company and CXT agreed to pay UPRR the aggregate amount of $ 50,000 without pre-judgment interest, which began with a $ 2,000 immediate payment, and with the remaining $ 48,000 paid in installments over a six-year period commencing on the effective date of the Settlement Agreement through December 2024 pursuant to a Promissory Note. Additionally, commencing in January 2019 and continuing through December 2024, UPRR agreed to purchase and has been purchasing from the Company and its subsidiaries and affiliates, a cumulative total amount of $ 48,000 of products and services, targeting $ 8,000 of annual purchases per year beginning March 13, 2019 per letters of intent under the Settlement Agreement. During the third quarter of 2021, in connection with the Company’s divestiture of its Piling Products division, the targeted annual purchases per year were reduced to $ 6,000 for 2021 through 2024. The Settlement Agreement also includes a mutual release of all claims and liability regarding or relating to all CXT pre-stressed concrete railroad ties with no admission of liability and dismissal of the litigation with prejudice. As of December 31, 2024 the UPRR Settlement Agreement has been fully paid. The Company reclassified $ 6,600 of the previously accrued warranty reserve related to the UPRR matter into its aggregate accrued settlement liability of $ 50,000 as of December 31, 2018. Therefore, the Company recognized $ 43,400 in expense for the year ended December 31, 2018 for the remaining amount per the Settlement Agreement, which was recorded in “Concrete Tie Settlement expense” within its Consolidated Statements of Operations. As of December 31, 2023, $ 8,000 was recorded within “Current portion of accrued settlement” within the Consolidated Balance Sheets. Other Legal Matters 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 December 31, 2024. 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 December 31, 2024, no such disclosures were considered necessary. Environmental Matters The Company is subject to national, state, foreign, provincial, and/or local laws and regulations relating to the protection of the environment. The Company’s efforts to comply with environmental regulations may have an adverse effect on its future earnings. On June 5, 2017, a General Notice Letter was received from the United States Environmental Protection Agency (“EPA”) indicating that the Company may be a potentially responsible party (“PRP”) regarding the Portland Harbor Superfund Site cleanup along with numerous other companies. More than 140 other companies received such a notice. The Company and a predecessor owned and operated a facility near the harbor site for a period prior to 1982. The net present value and undiscounted costs of the selected remedy throughout the harbor site are estimated by the EPA to be approximately $ 1.1 billion and $ 1.7 billion, respectively, and the remedial work is expected to take as long as 13 years to complete. Other estimates indicate that these costs may increase given that the remedy will not be initiated or completed for several years. The Company is reviewing the basis for its identification by the EPA and the nature of the historic operations of a Company predecessor near the site. Additionally, the Company executed a PRP agreement which provides for a private allocation process among almost 100 PRPs in a working group whose work is ongoing and involves a process that will ultimately conclude a proposed allocation of liability for cleanup of the site and various sub-areas. The Company does not have any individual risk sharing agreements in place with respect to the site, and was only associated with the site from 1976 to when it purchased the stock of a company whose assets it sold in 1982 and which was dissolved in 1994. On March 26, 2020, the EPA issued a Unilateral Administrative Order to two parties requiring them to perform remedial design work for that portion of the Harbor Superfund Site that includes the area closest to the facility; the Company was not a recipient of this Unilateral Administrative Order. On December 2, 2024, the Company and many other PRPs received a Special Notice Letter ("SNL") from the EPA regarding a formal initiation of negotiations for the investigation and cleanup of the Portland Harbor Superfund Site and 63 T able of Contents requesting a "good faith offer" from certain PRPs as to remediation and reimbursement of costs within 120 days, which, if accepted, would lead to a formal Consent Decree which may not be entered under the EPA's proposed schedule until fall of 2026 or by March 2027. The deadline for a response has been extended to May 30, 2025. The Company cannot predict the ultimate impact of these proceedings and the SNLs because of the large number of PRPs involved throughout the harbor site, the size and extent of the site, the degree of contamination of various wastes, varying environmental impacts throughout the harbor site, the scarcity of data related to the facility once operated by the Company and a predecessor, potential comparative liability between the allocation parties and regarding non-participants, and the speculative nature of the remediation costs. Based upon information currently available, management does not believe that the Company’s alleged PRP status regarding the Portland Harbor Superfund Site or other compliance with the present environmental protection laws will have a material adverse effect on the financial condition , results of operations, cash flows, competitive position, or capital expenditures of the Company. As more information develops and the allocation process is completed, and given the resolution factors like those described above, an unfavorable resolution could have a material adverse effect. As of December 31, 2024 and December 31, 2023, the Company maintained environmental reserves approximating $ 1,796 and $ 2,417 , respectively. The following table sets forth the Company’s undiscounted environmental obligation: Environmental Liability Balance as of December 31, 2023 $ 2,417 Additions to environmental obligations — Environmental reserve adjustment ( 600 ) Environmental obligations utilized ( 21 ) Balance as of December 31, 2024 $ 1,796 During the year ended December 31, 2024, the Company made an adjustment to reduce its environmental obligation by $ 600 . This adjustment was recorded to reflect the Company's current expectations of probable environmental remediation costs based on remediation progress, prospective estimates of required activity, and historical analysis. Note 18. Other Expense The following table summarizes the Company’s other expense - net for the years ended December 31, 2024 and 2023: 2024 2023 Pension termination costs (a) $ 1,722 $ — Loss on the sale of Chemtec (b) — 2,065 Loss on the sale of Concrete Ties (c) — 1,009 Insurance proceeds (d) ( 38 ) ( 215 ) Foreign currency (gains) losses ( 154 ) 77 Other ( 454 ) ( 301 ) Other expense - net $ 1,076 $ 2,635 a. During the fourth quarter of 2024, the Company terminated its US DB Plan generating pension settlement costs of $ 1,722 . b. 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, generating a $ 2,065 pre-tax loss. c. On June 30, 2023, the Company sold substantially all the operating assets of the Ties business, located in Spokane, WA, generating a $ 1,009 loss on the sale. d. In 2024 and 2023, the Company received $ 38 and $ 215 in insurance proceeds, respectively. Note 19. Restructuring Costs In August 2024, the Company announced an enterprise restructuring program aligned with its strategy to reduce costs and enable investment in its growth platforms. The restructuring action has been completed as of December 31, 2024. The following table sets forth restructuring costs by segment for the year ended December 31, 2024: Year Ended December 31, 2024 Rail, Technologies, and Services $ 1,134 Infrastructure Solutions 113 Corporate 209 Total $ 1,456 64 T able of Contents The Company's $ 1,456 restructuring expense relates primarily to severance. Of the total restructuring costs incurred for the year ended December 31, 2024, $ 245 was recorded in “Cost of goods sold” and $ 1,211 was reported in “Selling and administrative expense.” The Company does not anticipate any additional restructuring expense to be incurred associated with this program. The following table sets forth a reconciliation of the beginning and ending restructuring liability balance through December 31, 2024 (the remaining liability is expected to be paid in 2025): Restructuring Liability Balance as of December 31, 2023 $ — Restructuring costs 1,456 Cash paid ( 769 ) Balance as of December 31, 2024 $ 687 Note 20. Subsequent Events On March 3, 2025, the Company’s Board of Directors authorized the repurchase of up to $ 40,000 of the Company’s common stock in open market transactions and/or 10b5-1 trading plans through February 29, 2028. 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. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.