L.B. Foster Company (FSTR) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to your L.B. Foster Company Annual Shareholders' Meeting. [Operator Instructions] At this time, it is my pleasure to turn the floor over to Lee Foster. Sir, the floor is yours.

Thank you, Melinda. Good morning. I am Lee Foster, the company's Chairman of the Board. This Annual Meeting of Shareholders of L.B. Foster Company is now called to order. We have shareholders attending via the web portal. At this time, validated shareholders may ask questions in the designated field on the web portal. Responses to shareholder questions will be posted on the company's website, www.lbfoster.com. I would like to introduce the nominees for election to the Board of Directors: Dirk Jungé; Diane B. Owen; Robert S. Purgason; William H. Rackoff; Suzanne B. Rowland; Bradley S. Vizi; and Robert P. Bauer, a Director and the company's President and Chief Executive Officer; and myself, Lee B. Foster II. Also present are Patrick J. Guinee, Senior Vice President, General Counsel and Corporate Secretary of the company; and representatives of Ernst & Young, our independent registered public accountants. I hereby appoint Mr. Gregory Denman, an associate of Carl Hagberg & Associates to act as inspector of election. Mr. Denman signed an inspector's oath and has presented it to the secretary of the meeting. I ask Mr. Guinee to serve as secretary of this meeting and to report whether the requirements for the holding of this meeting have been fulfilled. Mr. Guinee, could you please give your report?

In compliance with the company's bylaws, the Board of Directors call this Annual Meeting of Shareholders and established March 27, 2020, as the record date for determination of shareholders entitled to notice of and to vote at this meeting. On or about April 16, 2020, Broadridge Financial Solutions mailed or e-mailed to common shareholders of record, either a notice of meeting, a proxy statement and proxy and the company's annual report for the year ended December 31, 2019, or notice of Internet availability containing instructions on how to cast your vote and access the company's annual report, notice of meeting, proxy statement and proxy, which have been previously posted on the Internet. The affidavit of Broadridge Financial Solutions indicating that such mailings occurred is present at the meeting. An alphabetical list of common shareholders showing the name, address and number of shares held by each shareholder as of the record date is present at this meeting for reference and is available for inspection. As noted in the proxy statement, a list has been available at the company's executive offices for a period of 10 days prior to the meeting. I will now ask the inspector of elections to provide the total for the quorum. Mr. Denman?

Thank you, Mr. Guinee. Of the 10,706,507 shares of common stock of the company that were outstanding on the record date for this meeting, they're all present, in person or by proxy, on file with the company more than 9,300,000 votes or more than 87% of the shares of such stock. This constitutes a quorum for the transaction of business.

Thank you, Mr. Denman. Since the requirements for calling this meeting have been duly observed and a quorum exists, I hereby declare this meeting to be duly constituted for the transaction of business. The first matter to be presented at this meeting is the election of 8 directors to serve until the next Annual Meeting of Shareholders and until their successors shall be elected and qualified. The Board of Directors' nominees for directors of the company are: Robert P. Bauer, Lee B. Foster II, Dirk Jungé, Diane B. Owen, Robert S. Purgason, William H. Rackoff, Suzanne B. Rowland and Bradley S. Vizi. Are there any other nominations for the Board of Directors? There being no further nominations, nominations for director of the company are hereby closed. The second matter to be presented at the meeting is the ratification of the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for 2020. Mr. Guinee, would you read the proposed resolution?

Resolved that the appointment of Ernst & Young as the company's independent registered public accounting firm be and it hereby is approved. Mr. Chairman?

The third matter to be presented at this meeting is to approve by advisory vote the compensation paid to the company's named executive officers. If any shareholder would like to submit a question, please submit your question through the web portal. Are there any other motions? There being none, we shall proceed. The voting on all matters submitted to this meeting shall be by ballot. The shares of those shareholders who have submitted a proxy will be voted by the proxy holders as directed. Any shareholder who has not yet voted or wishes to change their vote may do so by clicking on the Voting button the web portal -- on the web portal and following the instructions there. Shareholders who have sent in proxies or voted via telephone or Internet and who do not want to change their vote do not need to take any further action. [Voting]

All persons having voted, I declare the voting closed and request the inspector of elections to submit his report. I want to thank those of you who have shown your interest in the company by attending the meeting. I now have the report of the inspector of elections. Concerning the election of directors, each nominee received sufficient votes to be elected by a plurality of the votes cast. Accordingly, the Board of Directors' slate of nominees is elected. Concerning the ratification of Ernst & Young's appointment as independent registered public accounting firm, a majority of the votes cast were cast in favor of the ratification. Accordingly, the appointment of Ernst & Young has been approved. Concerning the advisory vote on the compensation paid to the company's named executive officers, a majority of the votes cast were cast to approve such compensation. Accordingly, the advisory vote to approve the executive compensation has been approved. Are there any additional matters to be presented at this meeting? There being no further business to be presented, I will entertain a motion to adjourn this meeting.

I so move.

I second the motion.

Ladies and gentlemen, with that motion, the Annual Shareholder Meeting has been adjourned. I would now like to turn the call over to Mr. Bauer, the company's President and CEO, for some closing remarks.

Thank you, Lee. First, on behalf of the management team and the Board of Directors, I'd like to express our appreciation to our shareholders for the support they've provided. We're all adapting to a new way of communicating in the current environment, and today's virtual meeting format is the first for the company. I personally believe that the advancements in technology that allow for a meeting of this type to take place will further enhance our ability to communicate with shareholders and allow us to provide the highest level of visibility into matters that shareholders are interested in. This is, of course, the wrap-up meeting for 2019, which seems like a long time ago given what has transpired since then, but I don't want to lose sight of the fact that we accomplished a lot in 2019 with continued improvement in profitability and free cash flow performance that further strengthened the company's balance sheet. Cash flow continues to be one of the primary reasons we hear investors are attracted to our stock, and we reported just over $29 million in operating cash flow for the year, improving 13% over the prior year. We reduced debt by almost $17 million for the year and put ourselves in a position to start 2020 with a stronger balance sheet and a solid starting backlog. Although 2020 didn't quite start as we had planned with some serious issues presented by stay-at-home orders, and risks associated with serious health consequences, we managed to continue operating as an essential business across North America and the United Kingdom with manufacturing operations and service personnel doing their best to support critical infrastructure projects. These are our frontline workers, and we're grateful that they're on our team. I hope you'll be able to join us for our second quarter earnings conference call, which should be scheduled in early August, where I expect us to elaborate as much as possible on our business environment and how conditions may be changing as customers and markets we serve move into the next phase of their operating strategy for 2020. I want to thank you again for joining us today, and we look forward to future discussions with you.

Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time. Have a great day.