L B Foster : FSTR Investor Presentation – March 2024

L.B. Foster Company Investor Presentation

Nasdaq - FSTR

March 2024

Safe Harbor Disclaimer

Safe Harbor Statement

This presentation may contain "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Forward-looking statements provide management's current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Sentences containing words such as "believe," "intend," "plan," "may," "expect," "should," "could," "anticipate," "estimate," "predict," "project," or their negatives, or other similar expressions of a future or forward-looking nature generally should be considered forward-looking statements. Forward-looking statements in this presentation are based on management's current expectations and assumptions about future events that involve inherent risks and uncertainties and may concern, among other things, the Company's expectations relating to our strategy, goals, projections, and plans regarding our financial position, liquidity, capital resources, and results of operations and decisions regarding our strategic growth initiatives, market position, and product development. 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 Company cautions readers that various factors could cause the actual results of the Company to differ materially from those indicated by forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Among the factors that could cause the actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties related to: any future global health crises, and the related social, regulatory, and economic impacts and the response thereto by the Company, our employees, our customers, and national, state, or local governments; a continuation or worsening of the adverse economic conditions in the markets we serve, including recession, the continued volatility in the prices for oil and gas, governmental travel restrictions, project delays, and budget shortfalls, or otherwise; volatility in the global capital markets, including interest rate fluctuations, which could adversely affect our ability to access the capital markets on terms that are favorable to us; restrictions on our ability to draw on our credit agreement, including as a result of any future inability to comply with restrictive covenants contained therein; a decrease in freight or transit rail traffic; environmental matters, including any costs associated with any remediation and monitoring of such matters; the risk of doing business in international markets, including compliance with anti-corruption and bribery laws, foreign currency fluctuations and inflation, global shipping disruptions, and trade restrictions or embargoes; our ability to effectuate our strategy, including cost reduction initiatives, and our ability to effectively integrate acquired businesses or to divest businesses, such as the recent dispositions of the Track Components, Chemtec, and Ties businesses, and acquisitions of the Skratch Enterprises Ltd., Intelligent Video Ltd., VanHooseCo Precast LLC, and Cougar Mountain Precast, LLC businesses and to realize anticipated benefits; costs of and impacts associated with shareholder activism; the timeliness and availability of materials from our major suppliers, as well as the impact on our access to supplies of customer preferences as to the origin of such supplies, such as customers' concerns about conflict minerals; labor disputes; cybersecurity risks such as data security breaches, malware, ransomware, "hacking," and identity theft, which could disrupt our business and may result in misuse or misappropriation of confidential or proprietary information, and could result in the disruption or damage to our systems, increased costs and losses, or an adverse effect to our reputation, business or financial condition; the continuing effectiveness of our ongoing implementation of an enterprise resource planning system; changes in current accounting estimates and their ultimate outcomes; the adequacy of internal and external sources of funds to meet financing needs, including our ability to negotiate any additional necessary amendments to our credit agreement or the terms of any new credit agreement, and reforms regarding the use of SOFR as a benchmark for establishing applicable interest rates; the Company's ability to manage its working capital requirements and indebtedness; domestic and international taxes, including estimates that may impact taxes; domestic and foreign government regulations, including tariffs; economic conditions and regulatory changes caused by the United Kingdom's exit from the European Union; geopolitical conditions, including the ongoing conflicts between Russia and Ukraine and Israel and Hamas; a lack of state or federal funding for new infrastructure projects; an increase in manufacturing or material costs; the loss of future revenues from current customers; and risks inherent in litigation and the outcome of litigation and product warranty claims.

All information in this presentation speaks only as of March 14, 2024 and any distribution of the presentation after that date is not intended and will not be construed as updating or confirming such information. L.B. Foster Company assumes no obligation to update or revise any forward-looking information, whether as a result of new information, future events, or otherwise, except as required by securities laws. The information in this presentation is unaudited, except where noted otherwise.

Non-GAAP Financial Measures

This investor presentation discloses the following non-GAAP measures:

• Earnings before interest, taxes, depreciation, and amortization ("EBITDA")
• Earnings before interest, taxes, depreciation, amortization, and certain charges ("Adjusted EBITDA")
• Net debt
• Gross Leverage Ratio per the Company's credit agreement
• Funding capacity
• Free cash flow
• Other certain metrics, as indicated, adjusted for non-routine items
• New orders
• Book-to-billratio
• Backlog
• Organic sales growth (decline)
• Net sales, excluding portfolio changes

The Company believes that EBITDA is useful to investors as a supplemental way to evaluate the ongoing operations of the Company's business since EBITDA may enhance investors' ability to compare historical periods as it adjusts for the impact of financing methods, tax law and strategy changes, and depreciation and amortization. In addition, EBITDA is a financial measure that management and the Company's Board of Directors use in their financial and operational decision- making and in the determination of certain compensation programs. Adjusted EBITDA adjusts for certain charges to EBITDA that the Company believes are unusual, non-recurring, unpredictable, or non-cash. The Company also discloses Adjusted EBITDA margin, which is Adjusted EBITDA as a percent of adjusted sales (as defined below), which is useful to demonstrate Adjusted EBITDA levels and growth relative to sales. In the three months ended December 31, 2023, the Company made adjustments to exclude expenses from the exit of the bridge grid deck product line, bad debt provision for customer filing for administrative protection, and restructuring costs. In the twelve months ended December 31, 2023, the Company made adjustments to exclude the loss on divestitures, expenses from the exit of the bridge grid deck product line, bad debt provision for customer filing for administrative protection, and restructuring costs. The Company believes the results adjusted to exclude the items listed above are useful to investors as these items are non-routine in nature. The Company also excluded the impact of non-routine items from certain metrics as indicated, in order to provide insight to Company performance on a base level without these non-routine items, which is useful to investors to better understand performance. The Company views net debt, which is total debt less cash and cash equivalents, and the Gross Leverage Ratio, as defined in the Second Amendment to its Fourth Amended and Restated Credit Agreement dated August 12, 2022, and the Fourth Amended and Restated Credit Agreement dated August 13, 2021, as important metrics of the operational and financial health of the organization and believe they are useful to investors as indicators of its ability to incur additional debt and to service its existing debt. The Company discloses funding capacity which is the net availability under the revolving credit facility plus cash and cash equivalents which the Company believes is useful to investors as it demonstrates the borrowing capacity of the Company. The Company discloses free cash flow as it is a non-GAAP measure used by both analysts and management, as it provides insight on cash generated by operations, excluding capital expenditures, in order to better assess the Company's long-term ability to pursue growth and investment opportunities. The Company discloses free cash flow yield, which is free cash flow as a percent of market capitalization which is useful to demonstrate free cash flow levels and growth relative to market capitalization. The Company defines new orders as a contractual agreement between the Company and a third-party in which the Company will, or has the ability to, satisfy the performance obligations of the promised products or services under the terms of the agreement. The Company defines backlog as contractual commitments to customers for which the Company's performance obligations have not been met, including with respect to new orders and contracts for which the Company has not begun any performance. Management utilizes new orders and backlog to evaluate the health of the industries in which the Company operates, the Company's current and future results of operations and financial prospects, and strategies for business development. The Company believes that new orders and backlog are useful to investors as supplemental metrics by which to measure the Company's current performance and prospective results of operations and financial performance. The Company defines book-to-bill ratio as new orders divided by revenue. The Company believes this is a useful metric to assess supply and demand, including order strength versus order fulfillment. Organic sales growth (decline) is a non- GAAP financial measure of sales growth (decline) excluding the effects of acquisitions and divestitures. Management believes this measure provides investors with a supplemental understanding of underlying trends by providing sales growth on a consistent basis. Management provides organic sales growth (decline) at the consolidated and segment levels. Portfolio changes are considered based on their comparative impact over the last twelve months, to determine the differences in 2022 versus 2023 results due to these transactions. Net sales, excluding portfolio changes is calculated to remove the impact of acquisitions and divestitures on total sales, which is useful to investors to understand the sales level in the Company's legacy business.

The Company has not reconciled the forward-looking adjusted EBITDA, adjusted EBITDA margin, free cash flow, and free cash flow yield to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability and low visibility with respect to certain costs, the most significant of which are acquisition and divestiture-related costs, impairment expense, and changes in operating assets and liabilities. These underlying expenses and others that may arise during the year are potential adjustments to future earnings. The Company expects the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.

Non-GAAP financial measures are not a substitute for GAAP financial results and should only be considered in conjunction with the Company's financial information that is presented in accordance with GAAP. Quantitative reconciliations of EBITDA, adjusted EBITDA, net debt, funding capacity, and adjustments to segment results to exclude one-time adjustments made, and organic sales are included in this presentation.

L.B. Foster Investor Deck	2
March 2024

Company Overview

"L.B. Foster Company has a rich history of innovation and customer service, and we are reinvigorated by the momentum building inside our business and the opportunity to grow shareholder value as a result of our strategic transformation."

John Kasel

President and CEO

L.B. Foster Investor Deck	3
March 2024

L.B. Foster Overview

Innovating to solve global infrastructure challenges

• Founded in 1902; headquartered in Pittsburgh, Pennsylvania
• Locations throughout North America, South America, Europe, and Asia
• 18 principal plants and offices; ~1,100 employees worldwide2
• Critical infrastructure solutions provider focused on growing innovative, technology-based offerings to address our customers' most challenging operating and safety requirements

Business Segments

Realigned reporting structure through two segments effective Q4 2023

	2023 Guidance		Low		High	Results
	and Results
	Revenue	$	530	$	540	$	544
	Adj. EBITDA1	$	29	$	31	$	32
	2024 Guidance				Low		High
	Revenue			$	525	$	560
	Adj. EBITDA1			$	34	$	39
	Free cash flow1			$	12	$	18
	Capex as a % of sales		2.0 %		2.5 %
	December 31, 2023 Financial Data
	Stock Price		$				21.99

Rail, Technologies,

and Services

Infrastructure

Solutions*

$600

$400

$200

$0

2023 Sales by Segment

($ in millions)

							$750
			$232	$544
			$600
							$450
	$312
					$300
							$150
							$0
	Rail	Infrastructure	Total 2023
					Sales

2023 Sales by Region

($ in millions)

$41 $25 $13

$544

$464

United United Canada Other Total

States Kingdom2023

Sales

Shares Outstanding		11
Market Capitalization	$	236
Debt	$	55
Cash	$	3
Enterprise Value	$	289
TTM Revenue	$	544
TTM Adj. EBITDA1	$	32
EV / Revenue		0.5
EV / Adj. EBITDA1		9.1
Covenant Leverage		1.7x

*Includes previous Precast Concrete Products and Steel Products and Measurement (now Steel Products business unit) reporting segments

Data shown above in millions, except stock price and ratios.

L.B. Foster Investor Deck	1)	Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures.	4
	2)	Location and employee data as of December 31, 2023.
March 2024
		Note figures may not foot due to rounding.

L.B. Foster Investment Thesis

Structural Improvement in	Business portfolio transformation, organic growth and focused
Profitability	profitability initiatives manifesting in improved results

Organic Growth Drivers in Place	Infrastructure pure play with a diverse set of avenues for
growth in multi-year infrastructure investment super cycle

Favorable Free Cash Flow	Improving margin and profitability outlook with capital-light
Inflection Point Imminent	business model and demonstrated free cash flow generation

Disciplined Capital Allocation

Multiple value-creating capital allocation levers at disposal

L.B. Foster Investor Deck	5
March 2024

Proud Legacy, Well-Positioned for Growth

1902

> Founded by Lee B. Foster as used rail resale company.

1973

> Entered into an agreement with Nippon Steel to thread and finish oilfield pipe.

1999

• Acquired CXT Inc., manufacturer of engineered precast and pre-stressed products used in rail and civil infrastructure.

2015

• Acquired U.K.-based Tew Engineering and Tew Plus, widening offering of technology solutions.

2021

• Refreshed strategy announced; changes to leadership team; initiated transformation into technology-focused,high-growth, infrastructure solutions provider.

1967

> Opened Bedford, PA bridge component fabrication facility.

1981

> L.B. Foster goes public, trading on the NASDAQ exchange (FSTR).

2010

• Acquired Portec Rail Products, a rail technology company with established presence in UK.

2014 - 2015

• Acquired several businesses in energy space; significantly reduced energy market exposure as part of strategic reassessment completed in 2021.

2021 - 2023

• Completed eight portfolio actions (4 acquisitions / 4 divestitures) transforming growth and profitability profile in line with strategic roadmap.

L.B. Foster Investor Deck	6
March 2024

Case for Action

Deteriorating Profitability / Stock Price Performance

• Energy and related freight rail market downturn
• Union Pacific lawsuit overhang
• Covid pandemic disruption
• Extended energy market infrastructure depression
• Removal from Russell 2000 index in 2021
• Overly complex business portfolio difficult to manage

Actions Taken to Begin Restoring Value

• Appointment of new Chairman and Board refreshment
• New CEO / CFO appointed in 2021
• Launched refreshed strategy; business transformation aligned with shareholder value drivers: improved Economic Profit and ROIC
• Established growth platforms: Rail Technologies and Precast Concrete; high margin, high return re-investment platforms
• Active portfolio management: Four acquisitions / four divestitures completed in approximately two years
• Market cap (~$260M)...inclusion in Russell 2000 expected in 2024

5-Year Share Price and Adjusted EBITDA Margin1

$30
$25				10%
$20				8%
$15
				5%
$10
$5				3%
$0				-%
2019	2020	2021	2022	2023

Share Price		Adj. EBITDA %

Impact of strategic transformation starting to manifest in results

L.B. Foster Investor Deck	1)	Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures.	7
March 2024		Share price data based on closing values on December 31 of respective years.

Strategic Transformation in Action

Divestitures and Exit

Lower Margin Profiles - Energy-Focused / Commoditized Businesses

2021 - Piling Products - Commoditized, working-capital intensive business 2022 - Track Components - Canadian rail spikes and anchors business 2023 - Chemtec Energy Services - EBITDA-neutral energy business

2023 - Concrete Railroad Ties - Commoditized EBITDA-neutral business

2023 - Bridge grid deck product line exit (not included in divestiture activity below)

Acquisitions

Higher Margin Profiles - Rail Technologies and Precast Concrete

2022 - Skratch and Intelligent Video (IV)

> U.K.-based digital display solutions company and safety solution company

2022 - VanHooseCo

• Precast company headquartered in Tennessee
• New technologies allow for margin expansion / application across existing portfolio
• ~$34M in sales (2023), with 2nd facility online 2H 2023 and ramping up in 2024

2023 - Cougar Mountain

• Tuck-inprecast acquisition added to existing Boise operations

Changes to Sales and Gross Margin

$600

$550

$500

$450

$400

$ in millions

$21	-$66	$20	-$32
$58	$544
$29
$514		$497
16.8%		18.0%	20.7%
Gross		Gross	Gross
Margin		Margin	Margin

		2021 Sales	Legacy Business	Acquisitions	Divestitures	2022 Sales	Legacy Business	Acquisitions	Divestitures	2023 Sales
L.B. Foster Investor Deck					$ in millions unless otherwise indicated. Figures may not foot due to rounding.	8
March 2024

Business Segments

"Our business portfolio represents a steady, long-term infrastructure pure play with significant headroom for growth and an improving margin and profitability profile."

John Kasel

President and CEO

L.B. Foster Investor Deck	9
March 2024

Business Segment Profile

$600 $500 $400 $300 $200 $100

$0

Full Year 2023 Sales by Segment

$ in millions

$232$544

$312

Rail

Infrastructure

2023 Sales

Full Year 2023 Gross Profit Margins

Rail, Technologies, and Services

Offering:

• Rail products / technology-based solutions improving safety / efficiency

Strategic Emphasis:

• Growth via mobile solutions, new geographies, and focus on technology
• Focus on rail safety and U.S. infrastructure spend to support long- term domestic growth

Infrastructure Solutions

Offering:

• Proprietary precast products to support North American civil infrastructure
• Bridge, protective pipeline coatings, and water well products and services

Strategic Emphasis:

• Precast expansion into adjacent markets, applications, and geographies
• Optimize cash generation, maintain competitive position to fund growth

20.0%
20.7%	20.8%	20.7%
10.0%
0.0%
Rail	Infrastructure	2023 GP Margin

L.B. Foster Investor Deck	$ in millions unless otherwise indicated. Figures may not foot due to rounding.	10
March 2024