L.B. Foster Company (FSTR) Q2 2026 earnings summary

Executive summary

• Achieved highest Q2 operating cash flow since 2017 at $17.9 million, reducing net debt by $13.5 million sequentially and $35.2 million year-over-year, with total debt down 41.2% year-over-year and gross leverage ratio at 1.0x.

• Q2 2026 net sales were $138.6 million, down 3.5% year-over-year, but gross margin improved 80 bps to 22.3% and net income rose 7.9% to $3.1 million.

• Year-to-date net sales increased 7.6% to $259.7 million, with net income up $3.8 million to $4.6 million and Adjusted EBITDA up 19.6% to $16.8 million.

• Strategic exit from non-core U.K. product lines (Tew Engineering) incurred $2.3–$2.6 million in related costs and restructuring actions.

• Backlog ended at $246.1 million, up 17.4% sequentially, supporting reaffirmed 2026 guidance.

Financial highlights

• Q2 net sales: $138.6 million (down 3.5% YoY); six-month net sales: $259.7 million (up 7.6% YoY); Q2 gross profit: $30.9 million; gross margin: 22.3% (up 80 bps YoY).

• Adjusted EBITDA for Q2: $11.7 million (down 4.7% YoY); YTD adjusted EBITDA up 19.6% to $16.8 million.

• SG&A expense increased 7.7% to $24.1 million, mainly due to higher incentive-based compensation, raising SG&A as a percent of sales to 17.4%.

• Operating cash flow YTD: $7.4 million, up $23.2 million from last year; Q2 free cash flow: $14.3 million, up 85% YoY.

• Total debt at quarter end: $48.0 million; net debt: $42.2 million; available funding capacity: $107.5 million.

Outlook and guidance

• Reaffirmed full-year 2026 guidance: net sales $540–580 million, Adjusted EBITDA $41–46 million, free cash flow $15–25 million, and capex ~2.7% of sales.

• 80% of current backlog expected to convert in the second half of 2026; guidance assumes no significant impact from current geopolitical landscape.

• Midpoints for sales and Adjusted EBITDA represent year-over-year growth of 3.7% and 11.3%, respectively.

• Demand outlook supported by government funding in North America and UK project activity; healthy demand for Precast Concrete and Protective Coatings.

• Management expects to complete remaining obligations for discontinued product lines by 2027.