PITTSBURGH, April 30, 2013 /PRNewswire/ -- L.B. Foster Company (NASDAQ: FSTR), a leading manufacturer, fabricator, and distributor of products and services for rail, construction, energy and utility markets, today reported its first quarter 2013 operating results which included a 13.2% increase in sales compared to the prior year first quarter and a 65.5% improvement in diluted earnings per share from continuing operations.
First quarter net sales of $129.3 million increased by $15.0 million or 13.2% due to a 22.2% increase in Rail segment sales and a 19.5% improvement in Tubular segment sales, partially offset by a 4.0% decline in Construction segment sales.
Gross profit margin was 19.2%, 30 basis points higher than the prior year, due principally to favorable material cost variances, partially offset by negative manufacturing variances.
First quarter income from continuing operations increased by 66.2% to $5.0 million or $0.48 per diluted share compared to income from continuing operations of $3.0 million or $0.29 per diluted share last year.
The March 2013 backlog was $248.1 million, 26.3% ($51.7 million) higher than March 2012 and increased $37.2 million from December 2012. First quarter bookings were $163.5 million compared to $171.1 million last year, a decrease of 4.5%. Orders for concrete ties and piling products were below prior year levels as anticipated.
Selling and administrative expenses increased by $0.2 million or 1.2% from the prior year, due principally to additional research and development costs associated with our rail technologies business.
The Company's income tax rate from continuing operations was 33.5% compared to 33.7% in the prior year. The nominal reduction in the effective tax rate relates primarily to additional domestic manufacturing deductions anticipated during 2013.
Cash used by continuing operating activities for the first quarter of 2013 was $17.6 million compared to a $2.9 million use of cash in the first quarter of 2012. The 2013 result was due principally to an increase in accounts receivable which resulted from a ramp up in sales beginning in mid-February. The Company's first quarter days sales outstanding calculation improved to 38 days compared to 41 days in the fourth quarter of 2012 and 45 days in the first quarter of 2012.
CEO Comments Robert P. Bauer, L.B. Foster's President and Chief Executive Officer, had the following comments on the first quarter results, "The first quarter was a strong start for 2013. The strength continues to be centered around our Rail and Tubular products with our Q1 backlog increase all coming from our Rail Business. This performance puts us in a good position to make our 2013 plans. The operating leverage in the quarter continues to reflect our improvements in efficiency and nice growth from our more profitable product lines. We kept expenses under control in the first quarter as we wanted to build confidence in the economy before further investing in certain programs. Going forward, we will continue to focus on our high priority growth opportunities and we expect to increase capital spending."
First Quarter Business Segment Highlights Rail Segment Rail segment sales increased 22.2% driven by strong sales in our rail distribution and transit products businesses. We recognized approximately $3.5 million of sales from the $60.0 millionHonolulu, HI elevated transit system project. Gross profit margin declined principally due to an unfavorable mix compared to the first quarter of 2012.
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Construction Segment Construction sales declined 4.0% in the quarter due principally to lower fabricated bridge product sales. The higher margin was due principally to improved concrete building margins.
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Tubular Segment Tubular products began the year with strong first quarter sales posting an increase of $1.8 million or 19.5% compared to the prior year quarter. Gross profit margins remained relatively stable for the three month periods ended March 31, 2013 and 2012.
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L.B. Foster Company will conduct a conference call and webcast to discuss its first quarter 2013 operating results on Tuesday, April 30, 2013 at 11:00am ET. The call will be hosted by Mr. Robert Bauer, President and Chief Executive Officer. Listen via audio on the L.B. Foster web site: www.lbfoster.com, by accessing the Investor Relations page. The replay can also be heard via telephone at +1-888-286-8010 by entering pass code 35637727.
This release may contain forward-looking statements that involve risks and uncertainties. Statements that do not relate strictly to historical or current facts are forward-looking. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. Actual results could differ materially from the results anticipated in any forward-looking statement. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company has based these forward-looking statements on current expectations and assumptions about future events. While the Company considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company's control. The risks and uncertainties that may affect the operations, performance and results of the Company's business and forward-looking statements include, but are not limited to, an economic slowdown in the markets we serve; a decrease in freight or passenger rail traffic; a lack of state or federal funding for new infrastructure projects; an increase in manufacturing or material costs; the ultimate number of concrete ties that will have to be replaced pursuant to the product claim; the outcome of the Inspector General subpoena; and those matters set forth in Item 8, Footnote 21, "Commitments and Contingent Liabilities" and in Item 1A, "Risk Factors" of the Company's Form 10-K for the year ended December 31, 2012. The Company urges all interested parties to read these reports to gain a better understanding of the many business and other risks that the Company faces. The forward-looking statements contained in this press release are made only as of the date hereof, and the Company assumes no obligation and does not intend to update or revise these statements, whether as a result of new information, future events or otherwise.