Fourth quarter net income of $2.4 million was favorable $2.6 million versus last year; Adjusted EBITDA1 of $13.7 million increased $6.4 million, or 89.0%, versus last year; Selling and administrative expenses as a percentage of sales were 14.4% for the quarter, favorable 470 bps versus last year.
Full year 2025 cash flow from operations was $35.6 million, with $22.2 million generated in the fourth quarter; operating cash flow was used to reduce total debt by $16.0 million during the quarter to $42.8 million, with Gross Leverage Ratio1 at 1.0x at year end compared to 1.2x last year.
The Company announced 2026 financial guidance with net sales expected to range from $540 million to $580 million and Adjusted EBITDA1 expected to range from $41 million to $46 million; Free Cash Flow1 is expected to range between $15 million and $25 million.
PITTSBURGH, March 03, 2026 (GLOBE NEWSWIRE) -- L.B. Foster Company (NASDAQ:FSTR), a global technology solutions provider of products and services for rail and infrastructure markets (the "Company"), reported fourth quarter and 2025 results.
Fourth Quarter Highlights
Three Months EndedDecember 31,
Change
2025
2024
2025 vs. 2024
(Unaudited)
Net sales
$
160,373
$
128,183
25.1
%
Operating income
7,835
3,052
156.7
%
Net income (loss) attributable to L.B. Foster Company
2,416
(242
)
**
Adjusted EBITDA1
13,679
7,238
89.0
%
Net cash provided by operating activities
22,172
24,285
(8.7
)%
Free Cash Flow1
19,805
22,328
(11.3
)%
Total debt
42,756
46,940
(8.9
)%
Gross Leverage Ratio1
1.0
x
1.2
x
(0.2
)x
New orders, net1
$
101,325
$
107,187
(5.5
)%
Backlog1
$
189,338
$
185,909
1.8
%
** Results of this calculation not considered meaningful.
Financial Guidance
2026 Full Year Financial Guidance
Low
High
Net sales
$
540,000
$
580,000
Adjusted EBITDA1
$
41,000
$
46,000
Capital spending as a percent of sales
~2.7
%
~2.7
%
Free Cash Flow1
$
15,000
$
25,000
CEO CommentsJohn Kasel, President and Chief Executive Officer, commented, "We finished 2025 with extraordinary organic sales growth, robust profitability expansion, and strong cash generation largely in line with our expectations. Both segments delivered exceptional results in the quarter led by Infrastructure sales growth at 27.3%, with Steel Products sales up a remarkable 58.2%, driven by improving Protective Coatings demand. Precast Concrete continued its strong run with sales up 18.7% over last year. The Rail segment realized top line growth for the first time in 2025, with fourth quarter sales up 23.7% led by Global Friction Management up 41.6% and Rail Products up 31.1%. Partially offsetting within Rail were Technology Services and Solutions sales down 24.7% due primarily to our continuing efforts to downsize our business in the United Kingdom ("UK"), given its challenging commercial environment."
Mr. Kasel continued, "Our profitability expansion in the quarter was robust, with Adjusted EBITDA of $13.7 million up 89.0% versus last year. Gross profit was up 10.6%, with the gross margin of 19.7%, reflecting weaker results in the UK Rail business coupled with the impact of strong Rail Distribution sales volumes. We recorded a $2.2 million charge associated with additional restructuring actions in our UK Rail business, which included further staff reductions and two facility consolidations. We're confident our proactive steps will lead to improving results in the UK in 2026. We leveraged our operating expenses in the quarter, with selling and administrative expenses as a percentage of sales declining 470 bps to 14.4%. The strong profitability growth and our normal working capital cycle generated $22.2 million in operating cash flow in the quarter, which was used primarily to reduce our debt $16.0 million further lowering our gross leverage to 1.0x at year end. We also funded the repurchase of approximately 121,000 shares of our stock for $3.3 million in line with our capital allocation priorities. Our strong free cash flow and disciplined capital allocation approach has positioned us well to expand investments in our strategic growth initiatives."
Mr. Kasel concluded, "I'm very proud of what our team accomplished in 2025, especially the strong finish in the fourth quarter. The performance of both segments was largely in line with our expectations, with isolated weakness in the UK the only detraction from the strong results in the quarter. Our guidance for 2026 reflects a continuation of the favorable momentum we've created in the business exiting 2025. We continued to invest in our growth platforms of Rail Technologies and Precast Concrete throughout 2025, and have plans to expand these investments in 2026 for future growth. Demand signals in our key end markets remain favorable, and we're well positioned to benefit from these positive trends. In summary, as we enter the fifth year of our strategic execution roadmap, I'm more confident than ever in the prospects for continuing profitable growth and value creation."
1 See "Non-GAAP Disclosures" at the end of this press release for a description of and information regarding Adjusted EBITDA, gross leverage ratio per the Company's credit agreement, new orders, net, backlog, book-to-bill ratio, Free Cash Flow, and related reconciliations to the comparable United States Generally Accepted Accounting Principles financial measures.
Fourth Quarter Consolidated HighlightsThe Company's fourth quarter performance highlights are reflected below:
Three Months EndedDecember 31,
Change
PercentChange
2025
2024
2025 vs. 2024
2025 vs. 2024
$ in thousands, unless otherwise noted:
(Unaudited)
Net sales
$
160,373
$
128,183
$
32,190
25.1
%
Gross profit
31,635
28,615
3,020
10.6
Gross profit margin
19.7
%
22.3
%
(260) bps
(11.6
)
Selling and administrative expenses
$
23,145
$
24,421
$
(1,276
)
(5.2
)
Selling and administrative expenses as a percent of sales
14.4
%
19.1
%
(470) bps
(24.7
)
Amortization expense
655
1,142
(487
)
(42.6
)
Operating income
$
7,835
$
3,052
$
4,783
156.7
Net income (loss) attributable to L.B. Foster Company
2,416
(242
)
2,658
**
Adjusted EBITDA1
13,679
7,238
6,441
89.0
New orders, net1
101,325
107,187
(5,862
)
(5.5
)
Backlog1
189,338
185,909
3,429
1.8
** Results of this calculation not considered meaningful.
Net sales for the 2025 fourth quarter increased $32.2 million, or 25.1%, over the prior year quarter. The increase was driven by sales growth in Rail, Technologies, and Services ("Rail"), improving $18.8 million, or 23.7%, over the prior year quarter due primarily to timing of large orders in the Rail Products business unit coupled with growth in Global Friction Management. Infrastructure Solutions ("Infrastructure") sales also improved $13.4 million, or 27.3%, over the prior year quarter with improved volumes in both business units.
Gross profit for the 2025 fourth quarter increased $3.0 million, or 10.6%, over the prior year quarter. Gross profit for Infrastructure improved $3.1 million due to higher sales volumes and improved business mix. Gross profit for Rail was essentially flat with the prior year quarter with improvements in Rail Products and Global Friction Management offset by weakness in the UK Rail business within Technology Services and Solutions. The Rail gross profit also includes $1.0 million of charges associated with restructuring actions taken in the UK Rail business. Gross profit margins declined 260 bps to 19.7% due to unfavorable sales mix and weaker results in the UK including the restructuring charges.
Selling and administrative expenses decreased $1.3 million, or 5.2%, from the prior year quarter. The decrease was attributable to $1.4 million lower administrative costs and $0.8 million lower net personnel costs, which included the impact of $0.6 million higher one-time compensation costs. Partially offsetting these reductions were $0.9 million higher restructuring charges, with the 2025 quarter including $1.2 million in costs associated with the UK restructuring compared to $0.3 million in restructuring charges last year. Selling and administrative expenses as a percent of net sales decreased 470 bps to 14.4% in the current quarter.
Operating income for the 2025 fourth quarter improved $4.8 million over the prior year quarter. The improvement was due to increased gross profit coupled with lower selling and administrative and amortization expenses.
Net income attributable to the Company for the 2025 fourth quarter improved $2.7 million over the prior year quarter. The improvement was due to favorable operating income and a reduction in other expenses due to $1.7 million of pension termination costs incurred in the prior year quarter.
Adjusted EBITDA for the 2025 fourth quarter improved $6.4 million, or 89.0%, over the prior year quarter. Adjustments for the 2025 fourth quarter include $2.2 million of restructuring costs associated with actions taken in the UK and $0.8 million in other charges including one-time compensation expenses and unplanned project costs. Adjustments for the 2024 fourth quarter include $0.5 million of employee-related restructuring costs and $1.7 million of pension termination costs.
Cash provided by operating activities was $22.2 million for the fourth quarter, a $2.1 million decrease from the prior year quarter due to slightly higher working capital needs this year.
Total debt as of December 31, 2025 was $42.8 million, a $16.0 million decline during the quarter and a $4.2 million decline from the prior year. The Company's gross leverage ratio per its credit agreement was 1.0x as of December 31, 2025, an improvement from 1.2x last year.
New orders, net for the 2025 fourth quarter decreased $5.9 million, or 5.5%, from the prior year quarter with the decrease realized in both segments. The trailing twelve month book-to-bill ratio1 was 1.00 : 1.00. Backlog increased $3.4 million over the prior year quarter due to a 55.3% increase in the Rail segment partially offset primarily by a third quarter order cancellation in the Infrastructure segment backlog which was down 25.2%.
Fourth Quarter Business Results by SegmentRail, Technologies, and Services Segment
Three Months EndedDecember 31,
Change
PercentChange
2025
2024
2025 vs. 2024
2025 vs. 2024
$ in thousands, unless otherwise noted:
(Unaudited)
Net sales
$
97,950
$
79,154
$
18,796
23.7
%
Gross profit
$
17,423
$
17,552
$
(129
)
(0.7
)
Gross profit margin
17.8
%
22.2
%
(440) bps
(19.8
)
Segment operating income
$
5,806
$
4,700
$
1,106
23.5
Segment operating income margin
5.9
%
5.9
%
0 bps
(0.2
)
New orders, net1
$
54,084
$
54,982
$
(898
)
(1.6
)
Backlog1
$
96,980
$
62,449
$
34,531
55.3
Net sales for the 2025 fourth quarter increased $18.8 million, or 23.7%, over the prior year quarter. This improvement was due primarily to the Rail Products business unit which increased $15.8 million, or 31.1%, over the prior year quarter completing the year with its highest fourth quarter sales on record. Global Friction Management net sales increased $6.2 million, or 41.6%, over the prior year quarter due to volume increases. Partially offsetting these increases was a decline of $3.3 million, or 24.7%, in the Technology Services and Solutions business unit net sales primarily attributed to the UK Rail business.
Gross profit for the 2025 fourth quarter was down slightly from the prior year quarter, and gross profit margins declined 440 basis points to 17.8%. The decline in gross profit and gross profit margins from the prior year quarter was primarily due to the Technology Services and Solutions business with lower sales volumes, higher costs, unfavorable mix, and the UK restructuring expense of $1.0 million contributing to a $6.6 million decline in gross profit. Partially offsetting this decline was Rail Products and Global Friction Management which had improved gross profit of $3.3 million and $3.2 million, respectively.
Segment operating income for the 2025 fourth quarter improved $1.1 million over the prior year quarter due to a $0.8 million decrease in selling and administrative expenses and $0.5 million lower amortization expense.
New orders, net decreased $0.9 million, driven primarily by a 27.4% decline in the Rail Products business unit due to order timing and a 13.4% decline in the Technology Services and Solutions business unit reflecting the continued right-sizing of our UK business, including the Company's decision to exit the Automation and Materials Handling product line ("AMH Exit"). These declines were partially offset by 58.4% order growth in the Global Friction Management business unit due to continuing strong demand. The trailing twelve month book-to-bill ratio1 was 1.11 : 1.00. Backlog increased $34.5 million over the prior year quarter driven by order book growth across all business units including an $18.0 million increase in backlog in the Technology Services and Solutions business driven by a large, multi-year order received in the UK in the third quarter. Additionally, Global Friction Management and Rail Products backlog increased 68.8% and 29.5%, respectively.
Infrastructure Solutions Segment
Three Months EndedDecember 31,
Change
PercentChange
2025
2024
2025 vs. 2024
2025 vs. 2024
$ in thousands, unless otherwise noted:
(Unaudited)
Net sales
$
62,423
$
49,029
$
13,394
27.3
%
Gross profit
$
14,212
$
11,063
$
3,149
28.5
Gross profit margin
22.8
%
