Benzinga | Aug 3, 2021 02:20PM EDT

L. B. Foster Reports Mixed Q2 Results, Margin Contraction

* L. B. Foster Co (NASDAQ:FSTR) reported second-quarter sales growth of 9.2% year-over-year to $154.5 million, beating the consensus estimate of $141.23 million.

* Adjusted EPS decreased to $0.27 from $0.66 in 2Q20, misses consensus estimates of $0.31.

* The gross margin contracted by 295 bps to 16.9%. Adjusted EBITDA of $8.34 million fell from $12.91 million in 2Q20, and margin contracted by 370 bps to 5.4%.

* L. B. Foster generated cash from operating activities year-to-date of $6.84 million, compared to $8.12 million a year ago. Free cash flow of $4.59 million.

* As of June 30, 2021, net debt was $33.1 million, a $4.4 million decrease from December 31, 2020.

* The company believes year-over-year operating margins continue to be adversely affected by weakness in the midstream energy markets resulting in lower sales volumes in the Coatings and Measurement business unit.

* Backlog increased by 12.4% Y/Y to $253.2 million, reflecting a significant increase in the Infrastructure Solutions segment of $31.6 million. New orders were $138.6 million (+3.5% Y/Y).

* Price action: FSTR shares traded lower by 0.17% at $18.13 on the last check Tuesday.