L.B. Foster Company

and thank you for standing by. Welcome to the Q3 2024 LB Foster Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 11 again. Please be advised that today's session is being recorded. I would now like to turn it over to Lisa Durante. Go ahead, Lisa.

Thank you, operator. Good morning, everyone, and welcome to L.B. Foster's third quarter of 2024 earnings call. My name is Lisa Durante, the company's investor relations manager. Our president and CEO, John Castle, and our chief financial officer, Bill Tommen, will be presenting our third quarter operating results, market outlook, and business developments this morning. We will start the call with John providing his commentary on the company's third quarter performance. Bill will then review the company's third quarter financial results. John will provide his perspective on market developments and company outlook in his closing comments. We will then open up the session for questions. Today's slide presentation, along with our earnings release and financial disclosures, were 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. Today's discussion includes corrections made to the company's previously reported financial statements as disclosed in the Form 10-K-A for 2023, and forms 10QA for the first and second quarters of 2024 filed with the Securities and Exchange Commission. 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 carefully read our disclosures and reconciliation tables provided within today's earnings release and presentation as you consider these metrics. So with that, let me turn the call over to John.

Thanks, Lisa, and hello, everyone. Thank you for joining us today for a third quarter earnings call. I'll start today's call by recognizing and welcoming Lisa Durante. Lisa was recently promoted to manager of financial reporting investor relations. I'm also pleased to announce that Stephanie Schmidt has been promoted to an expanded role in our financial reporting team. We're fortunate to have both Stephanie and Lisa leading our investor relations and financial reporting efforts and look forward to their continuing contributions. Congratulations, Lisa and Stephanie. Turning into the quarter, we're very pleased with the progress achieved during the third quarter as reflected in our exceptional profitability and cash generation results. These results clearly indicate our strategy to transform the profitability profile of our business is on track. The 23.8% gross margin reported represents the highest level we've seen in over a decade and was up 490 basis points over last year. The margins achieved were around $137.5 million in sales, which were down 5.4%, highlighting the improved portfolio profitability and efficiency. That income in the quarter was $35.9 million and included a $30 million favorable tax valuation reserve adjustment, noting that our improving profitability trends allow us to release this provision. And adjusted EBITDA was $12.3 million, up 16.4% over last year, despite the lower sales. with improved gross margins and lower SG&A expenses. As expected, and in line with our normal seasonal working capital cycle, we also delivered a very strong quarter of cash generation, with cash from operations totaling $24.7 million. Cash was deployed primarily to reduce our net debt by $17.7 million to $65.4 million at the quarter end. As a result of our lower debt levels and improving profitability, our gross leverage ratio improved by 0.8 times ending the quarter in an impressive 1.9 times. We also continued funding CapEx initiatives within the rail technology and precast concrete platforms. At the same time, we expanded our stock purchase program, buying approximately 127,000 shares for $2.6 million during the quarter. With the third quarter results largely in line with our expectations, we made modest updates to our 2024 financial guidance. We lowered the sales expectations slightly, but maintained the midpoint of our JustEvaDA outlook, in line with the improved earnings efficiency of the portfolio. And with the strong results achieved in the third quarter, we slightly increased our outlook, with the second half pre-cash flow now expected to range between $30 and $35 million. In summary, we're very pleased with our third quarter results and look forward to riding our continuing momentum to a strong finish to 2024. I'll turn it over to Bill to cover the financial details for the quarter, and I'll come back at the end with some closing remarks on our markets and outlook. Over to you, Bill.