L.B. Foster Company

Hello, and thank you for standing by. Welcome to L.B. Foster's second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. I would now like to turn the call over to Stephanie Schmidt of Investor Relations. You may begin.

Thank you, operator. Good morning, everyone, and welcome to L.B. Foster's second quarter of 2024 earnings call. My name is Stephanie Schmidt, the company's investor relations manager. Our president and CEO, John Castle, and our chief financial officer, Bill Tallman, will be presenting our second quarter operating results market outlook, and business developments this morning. We'll start the call with John providing his perspective on the company's second quarter performance. Bill will then review the company's second quarter financial results. John will provide perspective on market developments and company outlook in his closing comments. We will then open the session up for questions. Today's slide presentation, along with our earnings release and financial disclosures, We're posted on our website this morning and can be accessed on our investor relations page at lbfoster.com. Our comments this morning will follow the slides in the earnings presentation. Some statements we are making are forward-looking and represent our current view of our markets and business today. These forward-looking statements reflect our opinions only as of the date of this presentation. and we undertake no obligation to revise or publicly release the results of any revisions to these statements in light of new information, except as required by securities laws. For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and presentation. We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and reconciliation tables provided within today's earnings release and within our accompanying earnings presentation carefully as you consider these metrics. So with that, let me turn the call over to John.

Thanks, Stephanie, and hello, everyone. Thank you for joining us today for our second quarter earnings call. July 21st, 2024 marked the three-year anniversary of my appointment as President and CEO of LV Foster Company. I thought I'd begin today's call by providing a recap of what we accomplished over the last three years. I took over as president and CEO in 2021, which was a year of significant change for the company. Our current chairman, Ray Butler, had joined the board in 2020 and helped us through a strategic reassessment of the business in 2021. With Ray's guidance, leadership, and support, the board and senior management team established a strategic vision and an operating playbook to transform the company into a technology-oriented global infrastructure solutions provider. The cornerstone of the strategy was a portfolio assessment that established our growth platforms, namely rail technologies and precast concrete. These businesses would receive the investment funding needed to drive profitable growth in the business. The balance of the business became a returns platform. These businesses would be optimized for cash generation and were appropriately invested to generate additional proceeds to fund growth initiatives, both organic and in our Over a three-year period, we completed nine strategic transactions. We sold off four non-core businesses and exited a commoditized bridge grid decking product line. These transactions generated cash, improved leverage, and eliminated distractions to our core purpose. Proceeds from these divestitures were used to complete four acquisitions over the same time period, two in rail technologies in the United Kingdom and two in precast concrete in the United States. In late 2023, we completed a restructuring of our UK business in response to very challenging business conditions in the local market. More impactful, we just announced an enterprise-wide restructuring that, along with headcount attrition already achieved, should generate annual run rate savings of $4.5 million per year. I will come back with more on this topic in my closing comments. In summary, the impact flow of our transformation journey has been truly remarkable, as you can see in the results compared to 2021. Sales are up 6% due to the net impact of M&A. Adjusted gross margins are up 4 to 60 basis points. And the trailing 12 months adjusted EBITDA is up 64%, translating to a 37.9 adjusted EBITDA leverage on the net sales growth achieved. Now on to today. As mentioned in our earnings announcement, the second quarter was a bit weaker than we expected, and there's some near-term uncertainty in our end markets, given the broader recessionary concerns in the domestic and global economies. While we believe we will return to profitability expansion in the second half, we thought it would be prudent to be a bit more cautious with our financial guidance for 2024, given some of the larger macro drivers that could have a greater impact on demand rates through the end of the year. Despite the tempered outlook, the midpoint of our 2024 adjusted EBITDA guidance represents approximately 12% growth over 2023, a virtually flat organic sales growth. We're focused on what we control, getting back to profit expansion in the second half, and finishing 2024 strong so we can continue to build momentum towards achieving our aspirational goals. Bill will now cover the detailed financials for Q2, and I'll come back at the end with some close remarks on our markets and outlook. Over to you, Bill.