David Russo – SVP, CFO and Treasurer Stan Hasselbusch – President and CEO Lee Foster II – Chairman

Robert Damron – 21St Century Equity Research James Bank – Sidoti & Co. John Keeley – Keeley Asset Management Scott Blumenthal – Emerald Advisers

Thank you for your patience, and welcome to the First Quarter 2008 L.B. Foster Earnings Conference Call. My name is Candice and I'll be your coordinator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session after the prepared remarks. (Operator instructions) I would now like to turn the presentation over to our host for today's conference, Mr. David Russo, Chief Financial Officer. Sir, you may proceed.

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Thank you, David, and thanks to all of you for attending our first quarter 2008 earnings call and webcast. This morning, we announced record earnings for the first quarter. It was also the 13th consecutive quarter our Company has recorded an earnings increase over the previous year quarter. Sales were $93.4 million, compared to $110.7 million in the first quarter 2007. Income from continuing operations was $6.3 million or $0.57 per diluted share. Exclusive of a $2 million gain related to the sale last year of our assets in the Dakota, Minnesota & Eastern Railroad, and the gain of a sale and leaseback agreement of our Houston threading facility, income from continuing operations was $0.36 per share per share, compared to $0.28 per share in the first quarter 2007, a 29% improvement. : : Operational excellence will be critical in 2008 to offset the expected decline in our rail distribution and concrete tie revenue. Data we track indicates the constructions markets we are involved in are slowing down. Reconstruction data states that through March of this year, heavy engineering starts were off 11%, highway bridge starts were down 9% and non-residential starts decreased by 5%, compared to the same period in 2007. Our construction revenues were mixed in the first quarter. While piling sales were down 9% due to weather related shipment delays, both fab products and concrete buildings experienced sales improvements. Contrary to the forecasted downturn in the construction markets, we expect all three product lines in our construction group to exceed their 2007 performance this year. : : And just last week, L.B. Foster received the People Do Matter award, which recognizes innovation in human resources and is given annually by the Pittsburgh Human Resources Association. Our continued investment in the development of our employees will enable us to meet the challenges and opportunities of the future. Thank you. And now, I'd like to turn it back to David for our financial review.

Thank you, Stan. Before I begin the discussion on operating results, I would like to discuss the impact that two special items had on the Company's first quarter results. First item was $2 million of proceeds received late in the first quarter related to a favorable working capital adjustment pursuant to the prior year's sale of our investment in the DM&E Railroad. Estimated EPS impact of these proceeds was approximately $0.12 per diluted share. : : : : : : In Spokane, we continue to produce concrete ties for other Class One railroads, transit authorities, contractors and industrial customers, and we continue to experience reasonably active inquiry and bidding activity. As a percentage of consolidated sales, tubular accounted for 8% of sales, construction was 43%, and rails 49%. : : : : As I mentioned during our fourth quarter conference call, none of the DM&E proceeds have been used to pay down debt as of yet. Since March 31st of 2007, we have paid down approximately $36.4 million of debt with internally generated cash flows. First quarter pre-tax income from continuing operations was $6.4 million, compared to $4.8 million in last year's quarter, a $1.5 million, or 32% increase. As a percentage of sales, first quarter 2008 pre-tax was 6.8% versus 4.4% of sales in last year's quarter. The first quarter 2008 income tax provision was 36.1%, compared to 35.9% in last year's quarter. Income from continuing operations increased 31% to $4.1 million, or $0.36 per diluted share, compared to $3.1 million, or $0.28 per diluted share last year. Including the special items that we mentioned above, income from continuing operations was $6.3 million, which was 104% above the prior year. : : : In summary, we believe 2008 will be challenging, but also rich with opportunities. Those opportunities lie both internally in the area of process improvements, research and development, and improving our customer experience and development of our human capital as well as external opportunities with regard to market expansion and acquisitions. That concludes my comments on the first quarter. We will now open the session up to questions. Candice?

Thank you, sir. (Operator instructions) Our first question will come from the line of Rob Damron of 21st Century Equities. Please proceed. Rob Damron – 21st Century Equity Research: Good morning, guys. Let's see. I wanted to start I guess with the top line, first. You mentioned in the press release a few reasons on why you think 2008 sales will be challenging. And I was wondering if you could give us maybe a little bit more detail into how much revenue each of these issues is really causing you in 2008, for example, the reduction in sales to the DM&E Railroad. Also the – I guess the reduction in ties to the Union Pacific. Maybe give us some idea how many ties you sold to Union Pacific last year versus what you expect this year. And then also in the coated products area – what – I know you saw growth this quarter, but it looks like it's going to be challenging comparisons going forward. So just give us a little color on those issues.

: : : : Rob Damron – 21st Century Equity Research: Okay. And then just moving down to the gross margin line, despite the revenue decline the gross profit was very impressive, and maybe you can just give us a little more color there. I guess I am a bit surprised given lower volumes you can still generate higher gross profit. So just give us a little color on how you were able to do that.

: : Rob Damron – 21st Century Equity Research: Okay. And then – maybe you – you gave us a little color on what you thought were the I guess the expected decline in the construction segment, or construction industry in 2008, but how about just rail in general? How does that end-market feel for you as we look into '08?

I believe that – there's a couple of things that come into that. And really what we – one of the things that we really want to talk about is public spending. I think that public spending from a matching standpoint comes from the states. And I believe that what we track that – the coffers are lower, and so that matching portion is going to become much more difficult, particularly when you talk to rail in the transit side of it. But Class One's up. We are not seeing the double-digit increases that we've seen in the last couple of years, but spending in – with the Class Ones both in the maintenance of way and capital expenditures should be relatively flat, or up a little bit from what it was last year, Rob.

Part of the other issue too, Rob, is the nature of the Class One spend. I mean, over the last several years, it's been a very good benefit to us, especially with new construction it favors – certainly favors concrete ties. This year, obviously as we have announced the railroads are cutting back on some of that a little bit, so that's what has negatively impacted us at least so far this year. Rob Damron – 21st Century Equity Research: Okay. And then last question from me is the cash on the balance sheet. What are the plans for that cash? What's the acquisition pipeline look like, and should we expect an acquisition in '08?

That's a good point, Rob. I think that a couple of things can be said about that. We are very much into the acquisition mode. We have in the last quarter looked very closely at a couple of companies. When we couldn't get real comfortable with – for a couple of reasons, and another situation I don't think that the other company could really get comfortable with us. We are committed to continue this. We know that this is a strategic objective of the future. We are really concerned with value, but I think that we are in a very good position because of what we have on the balance sheet. And we are starting to see because of some of the credit crunches, and some of that pressure that we are seeing in the financial markets that some of the prices out there are starting to come down. So we are looking very actively, and we will continue to look. And we think that's an opportunity and also as far as with the cash, and David can talk about that a little bit more, but our Board also is exploring and taking a look at share buyback also. So–

Rob, I can tell you that as being a part of the team along with Stan that's worked on some things, that our organization has expended significant amount of efforts over the past four to five months looking at acquisitions, not only targeting, but negotiating with companies and really drilling down pretty hard. And we were disappointed in the couple that this year so far that have not transpired, but sometimes some of the best deals that you do are the ones that you don't do. So when we – as Stan mentioned we couldn't get comfortable with, we spent an inordinate amount of time on. And you never know when things come back to you. But we are continuing to spend a lot of time to continue the dialogs with the companies that are on the top of our list and it takes time. But as Stan also mentioned, we have seen – as a matter of fact, during negotiations on one deal, we have seen the private equity firms’ financing dry up to a certain extent, and during the course of a negotiation values come down. So we view that as a good thing, and hopefully our cash position will give us an advantage in the future. Rob Damron – 21st Century Equity Research: Okay, that's helpful. Thank you very much.

Thanks, Rob.

Our next question will come from the line of James Bank of Sidoti & Company. Please proceed. James Bank – Sidoti & Co.: Hi. Good morning.

Hey, James.

Hi, James. James Bank – Sidoti & Co.: With the 390 basis point gain in the quarter, how much of that can I attribute to the billing margin increase?

About 190 basis points, James. James Bank – Sidoti & Co.: Okay. And the rest was from the Tucson Tie and Alleghany Rail?

It was a part of it.

It was a part of it. It wasn't just those two facilities that had improvements by any means. They were a couple of the largest, but not just them. James Bank – Sidoti & Co.: And (inaudible), could you just bring me up to speed on where you are with the three concrete tie plants? How many shifts you are running, and what capacity you are at?

Well, sure. Capacity – and this is just roughly – we've got capacity of about 500,000 ties at Grand Island, about 375 at Tucson, and we probably have between 300 and 350 at Spokane. With that said, at both Spokane and – excuse me, at both Grand Island and Tucson, we're really running one shift. I mean, there is an overlapping shift there, James, but we are stretching out for operational efficiencies, our cure time, rather than eight hours, we are letting it go out a little bit longer from a cost savings perspective. We don't need as much from an additive standpoint. So–

And I would tell you, James, total tie production for the first quarter was probably 20% below last year. James Bank – Sidoti & Co.: Right. Can I have the segment gross profit? We have the sales. Could I have the gross profit and backlog?

We'll be putting that out in our Q, James. We are not – we don't want to give that just over the call. James Bank – Sidoti & Co.: Okay. And what is – what's really the catalyst behind Alleghany Rail this year?

Significant improvement. The facility really – which they accomplished gradually all year long last year. I mean, they were doing actually a very nice job in the third and fourth quarter of last year as well. But, a lot of excellent process improvement in Pueblo. The Niles facility is doing – has been doing an excellent job. And it's one area that the Class Ones as well as some other customers have really ramped up purchases, so the volumes are very nice as well.

And yes, I think that to David's point the Niles facility has benefited with some – the pickup of some additional work from the eastern lines last year, which carried into this year, and that activity is pretty good. I mean, we had good bookings in that in the first quarter, and we – we are ready, from a plant standpoint, to really get it and we are expecting a very good year in Alleghany Rail. James Bank – Sidoti & Co.: Okay. And from the bookings and backlog standpoint, was rail really the primary culprit behind that decrease?

New rail was the leading culprit, but the other two areas which we refer to, coated and ties, were both down, I think, and our backlog which is off $22 million from where it was last year, were down $28 million in new rails, so that far and away is the big area. And concrete ties, our backlog is down about 10.5, so those two lead the way there. James Bank – Sidoti & Co.: Okay. And one thing I am looking at with UP, purchasing so many concrete ties this year, and I know that the contract is in place, but are they going to need to double down on their purchases in '09?

I don't know whether they are going to need to double down, James, but because, as we've mentioned, two things really happened to them last year. We talked so much about problems that we were having in the southwest at our Tucson facility with permits. They were having construction permits on their Sunset line, we understand in the southwest. So their need wasn't – the demand wasn't there as much but they continued to buy, and they entered the year with around 400,000 ties in inventory. So they'll wear that – they'll work that off this year. But we are –- conversations that we continue to have with them is that they will be back up to '07 levels the next few years going forward as they continue to build out the Sunset line and continue their line that they are redoing going from Salt Lake City to Chicago. James Bank – Sidoti & Co.: Okay. And let me just get one more question, and then I'll jump back in line. Is there anything you could tell us in regard to or just bring us up to speed on the union negotiations you are having at the Bedford plant?

They are done. James Bank – Sidoti & Co.: Okay.

They are done. We–- James Bank – Sidoti & Co.: Is it going to be like Spokane, or is it going to be a little bit smoother?

It's done.

They're completed, James. James Bank – Sidoti & Co.: Okay, great.

It went well. It went very well.

They actually were – they did go very well, and that contract was completed early in the first quarter. James Bank – Sidoti & Co.: Okay, that's great. Thank you. I'll just jump back in line.

Thanks, James.

Our next question will come from the line of John Keeley of Keeley Asset Management. Please proceed. John Keeley – Keeley Asset Management: Good morning. My question had to do with the area of acquisitions, which I think you've already covered.

Thanks, Mr. Keeley.

(Operator instructions) Our next question will come from the line of Scott Blumenthal of Emerald Advisers. Please proceed. Scott Blumenthal – Emerald Advisers: Good morning, Stan. Good morning, Dave.

Good morning, Scott. How are you?

Good morning, Scott. Scott Blumenthal – Emerald Advisers: Okay. Fine, thank you. Stan, the press release said that consolidated sales declined 15.6% and you expect that trend to continue. You don't expect to see 15.6% sales declines every quarter, correct?

No. I think we expect that because of what we've mentioned in those three key product areas that – looking forward that we think that sales will be down not 15% from last year, but they will – forecast to be down. Scott Blumenthal – Emerald Advisers: Sure, yes. You had mentioned previously that you expected sales to be down because of these factors, but I think that you can interpret the press release as saying that you anticipate the trend to be15.6% for the rest – for the next few quarters.

It's really just the downward trend, Scott. Once again, you're going to get us a little close to giving you too much guidance which we won't do, so – but the trend is downward pressure on sales especially in the rail segment right now. Scott Blumenthal – Emerald Advisers: Yes, okay.

But not at that rate. Scott Blumenthal – Emerald Advisers: Sure. Thank you. Dave, can you talk about the SG&A this quarter? I know that you mentioned that you had taken some actions to reduce staffing, I believe, in Tucson and Grand Island when you found out that the tie count was going to be down considerably. Does this contain some severance, or some things that we probably – or that we might not see in–?

No. I mean, Scott, number one – I mean, the plant personnel that we unfortunately had to layoff at the very beginning of this year that rolls up in cost of goods sales, not SG&A, so that really had nothing to do with it. And at times, we do have some different items. We actually did have a deal cost that we had to expense in the first quarter as a result of us walking away from a couple of deals. We did hire some outside assistance related to due diligence and some – just some internal costs that we incurred, so that stuff goes right to the bottom line. Scott Blumenthal – Emerald Advisers: Sure.

We've had some new hires – some relocation costs go through our numbers that kind of thing. Nothing that we thought that was significant enough to point out and call out to the public. But there are just ongoing cost pressures that we do experience, and we are going to be taking a very close look at that especially as we move forward and to the extent that we see the downward sales trend continuing, we are going to take a very hard look at our SG&A costs and really be watchful of those. So that is definitely on our list of high priority things to remain vigilant about. Scott Blumenthal – Emerald Advisers: Understood, thank you. You mentioned also some operating margin pressures or decline in the tubular products, and can you give us a little bit more idea as to what you are facing there? Costs of materials, energy costs–?

Those are – a little bit has to do with just some of the issues that we have with – down to one shift, some of the costs just as a percentage of sales go up a little bit, Scott. But – and depending on – there's usually a couple of different jobs they are working on and each job has its own gross profit margin to it. So there's nothing in there that we view though as significant that we think is really going to continue. We expect – tubular margins really are good margins for the Company, and we expect them to stay strong this year. Scott Blumenthal – Emerald Advisers: Okay. And you did mention that the backlog has a lot less new rail, I believe.

Yes. Scott Blumenthal – Emerald Advisers: So we can assume that the margin profile of the backlog even though it's down is probably better.

It is than last year. Scott Blumenthal – Emerald Advisers: Yes, okay. And I guess my last question is, you gave some statistics to Rob about the number of ties that – the number of ties – comparing the number of ties from last year to this year, and also the amount of – pipe that was going to be coated – an estimate, and you also gave some rail statistics that I missed.

Rob's question was the impact, which we talked about of the loss of the DM&E. And my comment was is that, I believe that last year we did $15 million worth of new rail business with the DM&E, and approximately $7 million of it came in the first quarter. Scott Blumenthal – Emerald Advisers: Okay. And I guess my last one then – sorry about that, is that you did say, Stan, that you had made a decision to support domestic mills and not import rails. Is – am I reading into this? Is there some demand out there that you're just not able to supply at this point?

Well, let me just step back on that, Scott. We were the first company to bring in Chinese rail. We brought in 2006 just about 20,000 tons. And we felt that with relationships – and we value very much relationships at L.B. Foster Company, both on the supply side, and on the customer side – that in the long run that it would be best served to our shareholders to make a commitment to domestic supply in the rail side of it. From the Chinese – let me just say we have brought in Czech rail in the past. Not that much but – 80,000 ton of Chinese rail was brought in. Last year, we didn't bring anything in. We have – we believe that there will be supply that will be available. We are seeing the Chinese pricing go up faster than what we are seeing the domestic pricing– Scott Blumenthal – Emerald Advisers: Sure.

And we believe they are coming into play with the domestic supplier will really help us advantageously, and we've been working to that end for a couple of years actually. And as Steel Dynamics is – we very much admire them as a company and they are really – in their Columbia City facility they have a new plant, which – a second manufacturing operation will be coming online this summer. They've had some delays with it, but when that happens they will be able to pick up structural steel off of their first facility, and on that first facility will have the capability and have more flexibility to produce rail. And so we think that that’s going to be much better for us and for our shareholders in the long run. Scott Blumenthal – Emerald Advisers: Okay. But from the demand side of the equation, there isn't an issue with demand there that you are not able to supply as you wait for Steel Dynamics to get Columbia City up to speed?

No. Our inventory situation at the end of the quarter was right at $27 million, and as I said, we felt in this rising market – and we've seen price increases of new rail in the first four months in the neighborhood of $250, $300 a ton – we think it's very favorably priced. And the market, overall, is still being trending around a run rate of a million tons per year, and we expect that would continue this year. So, I think we are in a pretty good position. Scott Blumenthal – Emerald Advisers: Okay. That's very helpful. Thank you.

Thanks, Scott.

We have a follow-up question from the line of James Bank of Sidoti & Company. Please proceed. James Bank – Sidoti & Co.: Hi. Your Birmingham plant, is that – they are down to one shift now, right?

Yes, pretty much. I think, ten-hour a day shift. James Bank – Sidoti & Co.: I'm just confused how that one is outperforming and doing well. And if you could just help me understand because the year end backlog at the end of '07 was almost half of where it was at the end of '06, we don't know where it is right now. But you went from three shifts down to one. So I'm just – I'm definitely missing something here how your sales were up.

James, it's just timing of – when we coat the pipe and when we ship it doesn't always marry up, number one. Because we coat pipe and it gets stored and obviously ships when we get trains in . So the amount coated and the amount sold in anyone quarter may – aren't going to exactly line up. And we did have – last year we really didn't get ramped up until end of February and into March, and obviously we went to a second shift sometime I believe in middle April last year. So this is something where in the first quarter there's a – there's obviously a nice positive variance at the coated – in the coated business compared to last year, but we are going to be comping against much more – much higher numbers coming into second and third quarter. James Bank – Sidoti & Co.: Okay. And is there any news we might have if there is any on DM&E milestones were to hit some sort of trigger to the cash payments that are obligated to you?

Well first the CP has to decide to build the line, and they haven't done that yet. As a matter of fact, I believe that the CP, and actually – Lee probably knows better than me, but the CP is not even going to get approval for the acquisition until October, I believe. But, Lee wants to say–

Yes, the real issue right now is the Service Transportation Board that has deemed this to be a major transaction, and they have set a date for final approval at the end of September. So until that happens, the CP actually does not formally have ownership of the DM&E. Right now it is in a trust, and it is unlikely that they would make a determination on the project until such time as that ownership is complete. James Bank – Sidoti & Co.: Okay. Do you think they'd break ground next year, next spring, spring '09?

I think you'll have to ask them that question. James Bank – Sidoti & Co.: Okay. Fair enough, Lee. And that is all I have. Thank you.

Thank you.

This concludes the question-and-answer portion of today's conference. I will turn the call back to the speakers for any closing remarks.

Thank you all for attending, and have a good day.

Thank you for your participation. You may now disconnect. Have a great day.