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Rail News: Financials

L.B. Foster posts first-quarter net loss; CEO eyes return to revenue-increase lane


L.B. Foster Co. might have recorded a first-quarter net loss, but the company's chief executive expects a return to revenue-increase lane once Congress passes a new federal highway and transit bill.

Today, the manufacturer, fabricator and distributor of rail, construction and tubular products reported a net loss of $0.1 million for quarter ended March 31 compared with a net loss of $0.2 million for the same 2003 period. The company's first-quarter 2003 figures included a $0.2 million net loss from discontinued operations.

Net sales for first-quarter 2004 were $65.5 million, compared with $59.5 million for the same 2003 period — a 10 percent increase — while gross margins declined by 2.5 percentage points to 9.1 percent compared with the same 2003 period. The principal reasons for the net sales increase? A $4 million hike in sales from the company's Rail Products segment, and a $2.8 million increase in Construction Products sales.

"While we are pleased with the performance of our Rail and Piling distribution units, a drop-off in volume at our manufacturing facilities, notably Fabricated Products and Coated Pipe, negatively impacted profitability in the first quarter," said President and Chief Executive Officer Stan Hasselbusch in a prepared statement. "Fabricated Products' sales in the first quarter 2004, when compared to 2003, were down 31 percent; Coated Pipe's revenues were off 77 percent."

Meanwhile, delays in passing a new federal highway and transit bill continues to "hurt" the company's Fabricated Products unit, and could weaken the Construction segment's outlook over the next three to five months, Hasselbusch said. But Hasselbusch believes passage of a bill larger than TEA-21 is "imminent" and should result in increased revenues throughout for the company's rail and construction segments later this year, Hasselbusch said, adding that first-quarter bookings improved 8 percent compared with the same 2003 period, despite "a continued weak market environment."

Contact Progressive Railroading editorial staff.

More News from 4/20/2004