FOSTER L B CO 10-Q

Item 1. Financial Statements L.B. FOSTER COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) March 31, 2025 December 31, 2024 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 2,612 $ 2,454 Accounts receivable - net (Note 5) 57,132 64,978 Contract assets - net (Note 3) 13,359 16,720 Inventories - net (Note 6) 81,780 70,506 Other current assets 9,433 6,947 Total current assets 164,316 161,605 Property, plant, and equipment - net 75,863 75,374 Operating lease right-of-use assets - net 23,482 18,480 Other assets: Goodwill (Note 4) 32,358 31,907 Other intangibles - net (Note 4) 13,693 14,801 Deferred tax assets (Note 9) 29,630 28,900 Other assets 3,484 3,483 TOTAL ASSETS $ 342,826 $ 334,550 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 37,257 $ 50,083 Deferred revenue (Note 3) 10,126 10,205 Accrued payroll and employee benefits 5,313 15,393 Current maturities of long-term debt (Note 7) 151 167 Other accrued liabilities 11,018 12,448 Total current liabilities 63,865 88,296 Long-term debt (Note 7) 82,347 46,773 Deferred tax liabilities (Note 9) 1,112 1,150 Long-term operating lease liabilities 20,112 14,709 Other long-term liabilities 3,795 4,608 Stockholders’ equity: Common stock, par value $ 0.01 , authorized 20,000,000 shares; shares issued at March 31, 2025 and December 31, 2024, 11,115,779 ; shares outstanding at March 31, 2025 and December 31, 2024, 10,507,469 and 10,573,432 , respectively 111 111 Paid-in capital 41,823 43,550 Retained earnings 165,469 167,579 Treasury stock - at cost, 608,310 and 542,347 common stock shares at March 31, 2025 and December 31, 2024, respectively ( 14,736 ) ( 11,208 ) Accumulated other comprehensive loss ( 21,879 ) ( 21,716 ) Total L.B. Foster Company stockholders’ equity 170,788 178,316 Noncontrolling interest 807 698 Total stockholders’ equity 171,595 179,014 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 342,826 $ 334,550 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 3 Table of Contents L.B. FOSTER COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Ended March 31, 2025 2024 Sales of goods $ 86,548 $ 104,463 Sales of services 11,244 19,857 Total net sales 97,792 124,320 Cost of goods sold 66,938 81,542 Cost of services sold 10,703 16,602 Total cost of sales 77,641 98,144 Gross profit 20,151 26,176 Selling and administrative expenses 20,952 22,870 (Gain) on sale of former joint venture facility — ( 3,477 ) Amortization expense 1,122 1,217 Operating (loss) income ( 1,923 ) 5,566 Interest expense - net 1,143 1,125 Other income - net ( 318 ) ( 253 ) (Loss) income before income taxes ( 2,748 ) 4,694 Income tax (benefit) expense ( 631 ) 289 Net (loss) income ( 2,117 ) 4,405 Net loss attributable to noncontrolling interest ( 7 ) ( 31 ) Net (loss) income attributable to L.B. Foster Company $ ( 2,110 ) $ 4,436 Per share data attributable to L.B. Foster shareholders: Basic (loss) earnings per common share $ ( 0.20 ) $ 0.41 Diluted (loss) earnings per common share $ ( 0.20 ) $ 0.40 Basic weighted average shares outstanding 10,540 10,762 Diluted weighted average shares outstanding 10,540 10,985 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 4 Table of Contents L.B. FOSTER COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) (In thousands) Three Months Ended March 31, 2025 2024 Net (loss) income $ ( 2,117 ) $ 4,405 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustment 103 ( 1,497 ) Unrealized (loss) gain on cash flow hedges, net of tax expense of $ 0 ( 266 ) 106 Reclassification of pension liability adjustments to earnings, net of tax expense of $ 0 and $ 4 , respectively* — 25 Total comprehensive (loss) income ( 2,280 ) 3,039 Less comprehensive loss attributable to noncontrolling interest: Net loss attributable to noncontrolling interest ( 7 ) ( 31 ) Foreign currency translation adjustment 116 ( 17 ) Amounts attributable to noncontrolling interest 109 ( 48 ) Comprehensive (loss) income attributable to L.B. Foster Company $ ( 2,389 ) $ 3,087 * Reclassifications out of “Accumulated other comprehensive loss” for pension obligations are charged to “Selling and administrative expenses” within the Condensed Consolidated Statements of Operations. The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 5 Table of Contents L.B. FOSTER COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Three Months Ended March 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ ( 2,117 ) $ 4,405 Adjustments to reconcile net (loss) income to cash used in operating activities: Deferred income taxes ( 766 ) ( 41 ) Depreciation 2,305 2,374 Amortization 1,122 1,217 Equity in income of nonconsolidated investments ( 54 ) — Gain on sales and disposals of property, plant, and equipment — ( 3,574 ) Stock-based compensation 834 1,033 Change in operating assets and liabilities: Accounts receivable 7,756 ( 4,042 ) Contract assets 3,691 5,136 Inventories ( 11,083 ) ( 12,756 ) Other current assets ( 2,895 ) ( 3,262 ) Other noncurrent assets ( 5,236 ) 675 Accounts payable ( 12,649 ) 3,200 Deferred revenue ( 129 ) ( 1,008 ) Accrued payroll and employee benefits ( 10,129 ) ( 11,599 ) Other current liabilities ( 2,613 ) ( 1,807 ) Other long-term liabilities 5,827 ( 1,395 ) Net cash used in operating activities ( 26,136 ) ( 21,444 ) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from the sale of property, plant, and equipment — 3,501 Capital expenditures on property, plant, and equipment ( 2,575 ) ( 2,712 ) Net cash (used in) provided by investing activities ( 2,575 ) 789 CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of debt ( 71,314 ) ( 55,835 ) Proceeds from debt 106,205 78,746 Treasury stock acquisitions ( 6,071 ) ( 1,613 ) Net cash provided by financing activities 28,820 21,298 Effect of exchange rate changes on cash and cash equivalents 49 ( 55 ) Net increase in cash and cash equivalents 158 588 Cash and cash equivalents at beginning of period 2,454 2,560 Cash and cash equivalents at end of period $ 2,612 $ 3,148 Supplemental disclosure of cash flow information: Interest paid $ 1,010 $ 992 Income taxes paid $ 341 $ 303 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 6 Table of Contents L.B. FOSTER COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (Dollars in thousands) Three Months Ended March 31, 2025 Common Stock Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Noncontrolling Interest Total Stockholders’ Equity Balance, December 31, 2024 $ 111 $ 43,550 $ 167,579 $ ( 11,208 ) $ ( 21,716 ) $ 698 $ 179,014 Net loss — — ( 2,110 ) — — ( 7 ) ( 2,117 ) Other comprehensive loss, net of tax: Foreign currency translation adjustment — — — — 103 116 219 Unrealized derivative loss on cash flow hedges — — — — ( 266 ) — ( 266 ) Purchase of 168,911 common shares for treasury — — — ( 4,277 ) — — ( 4,277 ) Issuance of 95,952 common shares, net of shares withheld for taxes — ( 2,561 ) — 749 — — ( 1,812 ) Stock-based compensation — 834 — — — — 834 Balance, March 31, 2025 $ 111 $ 41,823 $ 165,469 $ ( 14,736 ) $ ( 21,879 ) $ 807 $ 171,595 Three Months Ended March 31, 2024 Common Stock Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Noncontrolling Interest Total Stockholders’ Equity Balance, December 31, 2023 $ 111 $ 43,111 $ 124,633 $ ( 6,494 ) $ ( 19,250 ) $ 724 $ 142,835 Net income (loss) — — 4,436 — — ( 31 ) 4,405 Other comprehensive income, net of tax: Pension liability adjustment — — — — 25 — 25 Foreign currency translation adjustment — — — — ( 1,497 ) ( 17 ) ( 1,514 ) Unrealized derivative gain on cash flow hedges — — — — 106 — 106 Purchase of 16,555 common shares for treasury — — — ( 385 ) — — ( 385 ) Issuance of 71,851 common shares, net of shares withheld for taxes — ( 2,278 ) — 1,050 — — ( 1,228 ) Stock-based compensation — 1,033 — — — — 1,033 Balance, March 31, 2024 $ 111 $ 41,866 $ 129,069 $ ( 5,829 ) $ ( 20,616 ) $ 676 $ 145,277 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 7 Table of Contents L.B. FOSTER COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollars in thousands, except share data) Note 1. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all estimates and adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. This Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and footnotes thereto included in L.B. Foster Company’s Annual Report on Form 10-K for the year ended December 31, 2024. In this Quarterly Report on Form 10-Q, references to “we,” “us,” “our,” and the “Company” refer collectively to L.B. Foster Company and its consolidated subsidiaries. Recently Issued Accounting Standards In November 2023, the FASB issued Accounting Standards Update 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires enhanced disclosures regarding significant segment expenses that are regularly reviewed by the chief operating decision maker (“CODM”) and included in each reported measure of segment operating income 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 operating income or loss to assess performance and allocate resources. The Company adopted this guidance for the interim period ended March 31, 2025 and applied the guidance retrospectively to all periods presented in the financial statements contained in this Quarterly Report on Form 10-Q. The 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 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 expects this ASU to only impact its disclosures with no impacts to its consolidated financial condition, results of operations, and cash flows. In November 2024, the FASB issued Accounting Standards Update 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require public business entities to disclose in the notes to the financial statements, at each interim and annual reporting period, specific information about certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each expense caption presented on the face of the income statement, and the total amount of an entity's selling expenses. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and may be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance on the consolidated financial statements. Note 2. Business Segments The Company is a global technology solutions provider of engineered, manufactured products and services that builds and supports infrastructure. The Company determines its operating segments based on how the Company's Chief Operating Decision Maker, 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. 8 Table of Contents The Company has two reportable segments: Rail, Technologies, and Services (“Rail”), and Infrastructure Solutions (“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. 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. 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 income - 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 for the periods presented: Three Months Ended March 31, 2025 Rail, Technologies, and Services Infrastructure Solutions Total Net sales $ 54,015 $ 43,777 $ 97,792 Less: Cost of sales ( 41,986 ) ( 35,655 ) ( 77,641 ) Selling and administrative employment costs ( 7,399 ) ( 5,564 ) ( 12,963 ) Purchased services (1) ( 1,673 ) ( 1,358 ) ( 3,031 ) General administrative costs (2) ( 1,993 ) ( 1,342 ) ( 3,335 ) Amortization expense ( 820 ) ( 302 ) ( 1,122 ) Segment operating income (loss) $ 144 $ ( 444 ) $ ( 300 ) Reconciliation of segment operating loss Total segment operating loss $ ( 300 ) Interest expense - net ( 1,143 ) Other income - net 318 Public company costs ( 1,154 ) Corporate executive management costs ( 220 ) Corporate management stock-based compensation ( 278 ) Other corporate expenses - net 29 Loss before income taxes $ ( 2,748 ) (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. 9 Table of Contents Three Months Ended March 31, 2024 Rail, Technologies, and Services Infrastructure Solutions Total Net sales $ 82,623 $ 41,697 $ 124,320 Less: Cost of sales ( 64,052 ) ( 34,092 ) ( 98,144 ) Selling and administrative employment costs ( 7,482 ) ( 5,818 ) ( 13,300 ) Purchased services (1) ( 1,939 ) ( 1,578 ) ( 3,517 ) General administrative costs (2) ( 1,501 ) ( 1,251 ) ( 2,752 ) Amortization expense ( 871 ) ( 346 ) ( 1,217 ) Segment operating income (loss) $ 6,778 $ ( 1,388 ) $ 5,390 Reconciliation of segment operating income Total segment operating income $ 5,390 Gain on sale of former joint venture facility 3,477 Interest expense - net ( 1,125 ) Other income - net 253 Public company costs ( 1,219 ) Corporate executive management costs ( 1,407 ) Corporate management stock-based compensation ( 599 ) Other corporate expenses ( 76 ) Income before income taxes $ 4,694 (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. For the three months ended March 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. Reconciliations of reportable depreciation and amortization and expenditures for long-lived assets to the Company’s consolidated totals are as follows for the periods ended March 31: Three Months Ended March 31, 2025 Depreciation/Amortization Expenditures for Long-Lived Assets Rail, Technologies, and Services $ 1,168 $ 427 Infrastructure Solutions 1,764 2,038 Reportable segments total $ 2,932 $ 2,465 Corporate 495 110 Total $ 3,427 $ 2,575 10 Table of Contents Three Months Ended March 31, 2024 Depreciation/Amortization Expenditures for Long-Lived Assets Rail, Technologies, and Services $ 1,221 $ 536 Infrastructure Solutions 1,911 2,033 Reportable segments total $ 3,132 $ 2,569 Corporate 459 143 Total $ 3,591 $ 2,712 The following table summarizes the Company's total assets by reportable segment for the following periods: March 31, 2025 December 31, 2024 Rail, Technologies, and Services $ 149,333 $ 158,859 Infrastructure Solutions 131,689 123,755 Reportable segments total 281,022 282,614 Corporate 61,804 51,936 Total $ 342,826 $ 334,550 On August 30, 2023, the Company announced the discontinuation of its Bridge Products grid deck product line (“Bridge Exit”) which was reported in the Steel Products business unit within Infrastructure. The Bedford, PA based operations supporting the product line expect to complete any remaining customer obligations in 2025. For the three months ended March 31, 2025 and 2024, the product line had $ 501 and $ 810 in sales, respectively. The Company does not expect to incur additional material exit costs in 2025. 11 Table of Contents Note 3. Revenue The following table summarizes the Company’s sales by major product and service line for the periods presented: Three Months Ended March 31, 2025 2024 Rail Products $ 29,319 $ 53,038 Global Friction Management 15,563 14,022 Technology Services and Solutions 9,133 15,563 Rail, Technologies, and Services 54,015 82,623 Precast Concrete Products 28,204 21,091 Steel Products 15,573 20,606 Infrastructure Solutions 43,777 41,697 Total net sales $ 97,792 $ 124,320 The majority of the Company’s revenue is from products transferred and services rendered to customers at a point in time. The Company recognizes revenue at the point in time at which the customer obtains control of the product or service, which is generally when the product title passes to the customer upon shipment or the service has been rendered to the customer. In limited cases, title does not transfer and revenue is not recognized until the customer has received the products at a designated physical location. Net sales by the timing of the transfer of goods and services was as follows for the periods presented: Three Months Ended March 31, 2025 Rail, Technologies, and Services Infrastructure Solutions Total Point in time $ 44,925 $ 28,627 $ 73,552 Over time 9,090 15,150 24,240 Total net sales $ 54,015 $ 43,777 $ 97,792 Three Months Ended March 31, 2024 Rail, Technologies, and Services Infrastructure Solutions Total Point in time $ 65,539 $ 29,657 $ 95,196 Over time 17,084 12,040 29,124 Total net sales $ 82,623 $ 41,697 $ 124,320 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 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 use of an input or an output measure to recognize revenue is determined based on what is most appropriate given the nature of the work performed and terms of the associated agreement. 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. As a result of management's reviews of contract-related estimates the Company makes adjustments to contract estimates that impact our revenue and profit totals. Changes in estimates are primarily attributed to updated considerations, including economic conditions and historic contract patterns, resulting in changes to anticipated revenue from existing contracts. During the three months ended March 31, 2025 and March 31, 2024, reductions to net sales stemming from changes in actual and expected values of certain commercial contracts and settlements of such contracts were not significant. The Company’s estimates related to these long-term agreements are further described in “Note 3. Revenue” of the Notes to the Company’s Consolidated Financial Statements contained in its Annual Report on Form 10-K for the year ended December 31, 2024. 12 Table of Contents Revenue recognized over time was as follows for the periods presented: Three Months Ended March 31, Percentage of Total Net Sales Three Months Ended March 31, 2025 2024 2025 2024 Over time input method $ 7,742 $ 13,143 7.9 % 10.6 % Over time output method 16,498 15,981 16.9 12.9 Total over time sales $ 24,240 $ 29,124 24.8 % 23.4 % The timing of revenue recognition, billings, and cash collections results in billed receivables, costs in excess of billings (included in “Contract assets - net”), and billings in excess of costs (contract liabilities), included in “Deferred revenue” within the Condensed Consolidated Balance Sheets. The following table sets forth the Company’s contract assets: Contract Assets Balance as of December 31, 2024 $ 16,720 Net additions to contract assets 1,935 Transfers from contract asset balance to accounts receivable ( 5,296 ) Balance as of March 31, 2025 $ 13,359 The following table sets forth the Company’s contract liabilities: Contract Liabilities Balance as of December 31, 2024 $ 1,991 Revenue recognized from contract liabilities ( 798 ) Increase in billings in excess of cost, excluding revenue recognized 599 Balance as of March 31, 2025 $ 1,792 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. As of March 31, 2025, the Company had approximately $ 237,215 of remaining performance obligations, which is also referred to as backlog. Approximately 10.1 % of the March 31, 2025 backlog was related to projects that are anticipated to extend beyond March 31, 2026. Note 4. Goodwill and Other Intangible Assets The following table presents the changes in goodwill balance by reportable segment for the period presented: Rail, Technologies, and Services Infrastructure Solutions Total Balance as of December 31, 2024 $ 20,231 $ 11,676 $ 31,907 Foreign currency translation impact 451 — 451 Balance as of March 31, 2025 $ 20,682 $ 11,676 $ 32,358 The Company performs goodwill impairment tests annually during the fourth quarter, and also performs interim goodwill impairment tests if it is determined that it is more likely than not that the fair value of a reporting unit is less than the carrying amount. Qualitative factors are assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount, which includes the impacts of current economic conditions, including but not limited to concerns related to inflation, tariffs, labor markets, supply chains, and changes in trade policy. However, these factors can be unpredictable and are subject to change. No interim goodwill impairment test was required as a result of the evaluation of qualitative factors as of March 31, 2025. However, future impairment charges could result if future projections diverge unfavorably from current expectations. The following table sets forth the components of the Company’s intangible assets for the periods presented: 13 Table of Contents March 31, 2025 Weighted Average Amortization Period In Years Gross Carrying Value Accumulated Amortization Net Carrying Amount Patents 10 $ 310 $ ( 201 ) $ 109 Customer relationships 12 28,311 ( 20,737 ) 7,574 Trademarks and trade names 13 8,007 ( 5,378 ) 2,629 Technology 9 32,695 ( 29,496 ) 3,199 Favorable lease 6 327 ( 145 ) 182 $ 69,650 $ ( 55,957 ) $ 13,693 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 Note 5. Accounts Receivable Changes in reserves for uncollectible accounts are recorded as part of “Selling and administrative expenses” in the Condensed Consolidated Statements of Operations, and a net expense was recorded of $ 191 and $ 396 for the three months ended March 31, 2025 and 2024, respectively. The changes in reserves for uncollectible accounts are net of recoveries of previous write-offs of $ 203 for the three months ended March 31, 2025. The Company established the allowance for credit losses by calculating the amount to reserve based on the age of a given trade receivable and considering historical collection patterns, bad debt expense experience, expected future trends of collections, current and expected market conditions, and any other relevant subjective adjustments as needed. Management maintains high-quality credit review practices and positive customer relationships that mitigate credit risks. 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 Balance as of December 31, 2024 $ 1,127 Current period provision 394 Write-off against allowance ( 6 ) Recoveries of previous write-offs ( 203 ) Balance as of March 31, 2025 $ 1,312 14 Table of Contents Note 6. Inventory Inventory is valued at average cost or net realizable value, whichever is lower. The Company’s components of inventory are summarized in the following table for the periods presented: March 31, 2025 December 31, 2024 Finished goods $ 45,458 $ 37,238 Work-in-process 7,287 6,717 Raw materials 29,035 26,551 Inventories - net $ 81,780 $ 70,506 Note 7. Long-Term Debt and Related Matters Long-term debt consisted of the following: March 31, 2025 December 31, 2024 Revolving credit facility $ 82,067 $ 46,467 Finance leases and financing agreements 431 473 Total 82,498 46,940 Less current maturities ( 151 ) ( 167 ) Long-term portion $ 82,347 $ 46,773 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 March 31, 2025, the Company was in compliance with the covenants in the Credit Agreement, as amended, and had outstanding letters of credit of approximately $ 755 . 15 Table of Contents Note 8. (Loss) Earnings Per Common Share (Share amounts in thousands) The following table sets forth the computation of basic and diluted (loss) earnings per common share for the periods indicated: Three Months Ended March 31, 2025 2024 Numerator for basic and diluted (loss) earnings per common share: Net (loss) income attributable to L.B. Foster Company $ ( 2,110 ) $ 4,436 Denominator: Weighted average shares outstanding 10,540 10,762 Denominator for basic earnings per common share 10,540 10,762 Effect of dilutive securities: Stock compensation plans — 223 Dilutive potential common shares — 223 Denominator for diluted (loss) earnings per common share - adjusted weighted average shares outstanding 10,540 10,985 Basic (loss) earnings per common share $ ( 0.20 ) $ 0.41 Diluted (loss) earnings per common share $ ( 0.20 ) $ 0.40 There were 498 anti-dilutive shares for the three months ended March 31, 2025. Note 9. Income Taxes For the three months ended March 31, 2025 and 2024, the Company recorded an income tax benefit of $ 631 on pre-tax losses of $ 2,748 and an income tax expense of $ 289 on pre-tax income of $ 4,694 , respectively, for an effective income tax rate of 23.0 % and 6.2 %, respectively. The Company's effective income tax rate for the three months ended March 31, 2025 differed from the federal statutory rate of 21% primarily due to state income taxes, nondeductible expenses and the discrete impact of excess tax benefits related to share-based compensation, offset by the impact of pre-tax losses in foreign jurisdictions with full valuation allowances for which no income tax benefit was recognized. Changes in pre-tax income projections, combined with the seasonal nature of our businesses, could also impact the effective income tax rate each quarter. Note 10. Stock-Based Compensation The Company recorded stock-based compensation expense of $ 834 and $ 1,033 for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, unrecognized compensation expense for awards that the Company expects to vest approximated $ 4,028 . The Company will recognize this unrecognized compensation expense over a weighted average 1.4 years through February 13, 2027. As of March 31, 2025, the Company had stock awards issued pursuant to the 2022 Equity and Incentive Compensation Plan (the "Equity and Incentive Plan") and its predecessor, the 2006 Omnibus Incentive Compensation Plan (the "Omnibus Plan"). No stock options are outstanding under either the Omnibus Plan or Equity and Incentive Plan and, as such, there was no stock-based compensation expense related to stock options recorded for the three months ended March 31, 2025 and 2024. 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. Under the terms of the 2022 Equity and Incentive Compensation Plan, a non-employee Board member may elect to receive fully vested stock in lieu of quarterly cash compensation. 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 16 Table of Contents 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. The following table summarizes the restricted stock, deferred stock units, and performance-based stock and share unit activity for the periods presented: Restricted Stock Performance-Based Stock and Share Units Weighted Average Grant Date Fair Value Outstanding as of December 31, 2024 203,552 534,521 $ 16.31 Vested ( 72,662 ) ( 88,641 ) 14.61 Cancelled and forfeited ( 1,167 ) ( 45,524 ) 13.06 Outstanding as of March 31, 2025 129,723 400,356 $ 16.57 During the three months ended March 31, 2025, the Company made no grants of restricted stock or performance-based stock and share units. Note 11. 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, respectively. The August 12, 2022 interest rate swap expired on March 1, 2025. The August 31, 2022 interest rate swap expires on August 13, 2026. The fair value of the interest rate swaps are based on market-observable forward interest rates and represents the estimated amount that the Company would pay to terminate the agreements. As such, the swap agreements are classified as Level 2 within the fair value hierarchy. As of March 31, 2025 and December 31, 2024, the interest rate swaps were recorded in “ Other current assets ” when the interest rate swaps’ fair market value are in an asset position, and “Other accrued liabilities” when in a liability position within our Condensed Consolidated Balance Sheets. Fair Value Measurements at Reporting Date Fair Value Measurements at Reporting Date March 31, 2025 Level 1 Level 2 Level 3 December 31, 2024 Level 1 Level 2 Level 3 Interest rate swaps $ 164 $ — $ 164 $ — $ 430 $ — $ 430 $ — Total assets $ 164 $ — $ 164 $ — $ 430 $ — $ 430 $ — The $ 20,000 interest rate swap agreements that became effective August 2022 are accounted for as cash flow hedges and the objective of the hedges is to offset the expected interest variability on payments associated with the interest rate on our debt. The gains and losses related to the interest rate swaps are reclassified from “Accumulated other comprehensive loss” in our Condensed Consolidated Balance Sheets and included in “Interest expense - net” in our Condensed Consolidated Statements of Operations as the interest expense from our debt is recognized. For the three months ended March 31, 2025 and 2024, the Company recognized interest income of $ 218 and $ 337 , respectively, from interest rate swaps. 17 Table of Contents Note 12. Retirement Plans The Company has two defined contribution retirement plans that cover its hourly and salaried employees in the United States. 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 applicable to each respective plan. The Company’s policy is to contribute at least the minimum in accordance with the funding standards of ERISA. The Company maintains one defined contribution plan 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. During the fourth quarter of 2024, the Company completed the termination of the US DB Plan. 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 of the UK DB Plan 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. United Kingdom Defined Benefit Plan Net periodic pension costs were as follows for the periods presented: Three Months Ended March 31, 2025 2024 Interest cost $ 62 $ 56 Expected return on plan assets ( 83 ) ( 94 ) Amortization of prior service costs and transition amount 6 6 Recognized net actuarial loss 10 8 Net periodic pension income $ ( 5 ) $ ( 24 ) 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 for the periods presented: Three Months Ended March 31, 2025 2024 United States $ 713 $ 551 Canada 70 76 United Kingdom 271 281 $ 1,054 $ 908 18 Table of Contents Note 13. Commitments and Contingent Liabilities Product Liability Claims 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 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. Union Pacific Railroad (“UPRR”) Concrete Tie Matter On March 13, 2019, the Company and its subsidiary, CXT Incorporated (“CXT”), entered into a Settlement Agreement (the “Settlement Agreement”) with UPRR to resolve the then-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. As of December 31, 2024 the UPRR Settlement Agreement has been fully paid and UPRR's purchase obligations under this Agreement have been satisfied. Environmental and Legal Proceedings 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 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 of factors like those described above, an unfavorable resolution could have a material adverse effect. As of March 31, 2025 and December 31, 2024, the Company maintained environmental reserves approximating $ 1,755 and $ 1,796 , respectively. 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 and no additional costs are expected to be incurred. As of December 31, 2024, the Company's restructuring liability was $ 687 , a majority of which was paid out during the first quarter of 2025. 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 19 Table of Contents 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 March 31, 2025. 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 March 31, 2025, no such disclosures were considered necessary. 20 Table of Contents