FOSTER L B CO

CEO Comments

John Kasel, President and Chief Executive Officer, commented, "We started the second half of the year with strong momentum, delivering meaningful growth in sales, profitability, and cash generation during the third quarter. Sales increased 21.5% over the prior year quarter, reflecting strong growth across both segments, while Adjusted EBITDA 1 increased 15.1%. Gross profit expanded $3.4 million during the quarter despite a decline in gross margin of 200 bps

1 See "Non-GAAP Disclosures" at the end of this press release for a description of and information regarding EBITDA, 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.

to 20.5%. The margin decrease was primarily attributable to business mix within Rail, Technologies, and Services ("Rail"), reflecting stronger sales growth in the lower-margin Rail Distribution and UK businesses. Additionally, selling and administrative expense as a percentage of sales declined 190 bps to 14.1% reflecting continued operating discipline and sales growth. On a year-to-date basis, we are pleased with our sales growth of $48.1 million or 12.7% with growth occurring in both segments. This growth helped drive a $4.5 million, or 17.6%, expansion in Adjusted EBITDA 1 over the prior year."

Mr. Kasel continued, "Our third quarter operating cash flow of $23.6 million enabled us to reduce total debt by $19.3 million during the quarter and by $30.0 million compared to the prior year quarter, to the lowest level in over a decade. The continued strengthening of our balance sheet provides additional financial flexibility and positions us well to pursue our strategic growth initiatives. Consistent with that strategy, as reported in our press release dated October 29, 2026, we completed the acquisition of the operating assets of the residential wastewater precast business and the Aeris aerobic treatment systems platform of Dulworth Enterprises Inc. ("Dulworth") on October 28, 2026 for approximately $52.2 million. Our revised guidance assumes no material impact from this acquisition and excludes any impacts of purchase accounting adjustments and transaction-related costs."

Mr. Kasel concluded, "We continue to see healthy customer demand, particularly across our Rail Distribution and UK businesses, driving year-over-year growth in new orders and supporting an increase in our full-year sales outlook. Additionally, we are narrowing our full-year guidance range for Adjusted EBITDA and increasing our Free Cash Flow range to reflect our current business mix and operating conditions. As we enter the final quarter of the year, we remain focused on disciplined execution, cash generation, and integrating Dulworth."