Greetings, and welcome to the L.B. Foster Third Quarter 2016 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. David Russo, Thank you. You may begin.

Thank you. Good evening ladies and gentlemen, thank you for joining us for L.B. Foster Company's earnings conference call to review the company's third quarter 2016 operating results. My name is David Russo and I'm the Chief Financial Officer of L.B. Foster. Hosting the call today is Mr. Robert Bauer, L.B. Foster's President and CEO. We do have a third quarter presentation on our Web site under the Investor Relation's tab for those who have online access. This morning, Bob will review the company's third quarter performance and provide an update on significant business issues, as well as company and market developments. Afterward, I will review the company's third quarter financial results and then we will open up the session for questions. During today's call, our commentary and responses to your questions may contain certain forward-looking statements, including items such as the company's outlook for our businesses and markets, cash flows, margins, operating costs, capital expenditures and other key business metrics, issues and projections. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from statements we make today. These forward-looking statements reflect our opinions only as of the date of this presentation, and we undertake no obligation to revise or publicly release the results of any revisions to these statements in light of new information, except as required by law. All participants are encouraged to refer to L.B. Foster's Annual Report on Form 10-K for the year ended December 31, 2015, as updated by subsequent Form 10-Qs or other pertinent items filed with the Securities and Exchange Commission for additional information regarding risk factors that may affect our results. In addition to the results provided in accordance with United States Generally Accepted Accounting Principles, our commentary includes certain non-GAAP statements, including EBITDA,…

Thank you, Dave, and hello everyone. Thank you for joining us today. I'm going to focus on two areas; first, the market factors which have created the more significant challenges for us and how they have affected operating results; and second, the most significant actions we've taken to address business conditions. Starting with our third quarter sales results, as we've reported consolidated sales in Q3, we are down 35%. Our two distribution businesses, rail distribution and piling have had a significant impact on the sales decline. Both have declined in ton sold and both have been impacted by the declining price of steel. I'm going to start with rail segment sales and describe these in more detail. Third quarter rail segment sales, excluding a $3.7 million acquisition impact were down 40% year-over-year, and rail distribution accounted for $21.4 million of the $34.8 million sales decline year-over-year, or 61% of the decline. The rail distribution division, which largely serves Class-2 carriers, industrial customers in the transit market North America has been industrial projects decline significantly. Declining steel prices apply the significant role in the sales decline. Price per ton in Q3 for new rails sold was down approximately 24% year-over-year. The price per ton on new rail sales has declined sequentially now for the last four quarters. With scrap prices at low levels and factory utilization of less than optimal levels, pressure on end market pricing has increased. On a nine-month year-to-date basis, the average selling price of new rail is down 20% year-over-year. Excluding the rail distribution division, the other divisions combined in our rail segment were down 27% in the quarter. They've largely been affected by the reduction in spending in the North American freight rail market, including the Class-1 carriers all rail companies that we can track have…

Thank you, Bob. Net sales for the third quarter of 2016 were $114.6 million, compared to $176.1 million in the prior year, a decrease of $61.4 million or 34.9%. Gross profit margin was 17.3%, a decrease of 320 basis points, as compared to 20.5% last year. We experienced margin compression in all three segments, but most notably in the tubular energy services segment. Moving on to expenses, consolidated selling and administrative expenses decreased by $1.8 million or 8.3% to $19.8 million due to our ongoing cost reduction initiatives totaling $1.6 million as well as to lower incentive costs of $0.7 million and lower acquisition and integration expenses, which were partially offset by increased litigation expenses of $0.6 million and to a lesser extend increased ERP costs. Excluding the increases related to litigation and ERP, selling, general and administrative expenses decline by $2.7 million or 13% on a consolidated basis. As a percentage of sales, SG&A increased by 500 basis points to 17.3% driven by the lack of leverage from the decline in sales. Amortization expense decreased by $1.6 million to $1.8 million in Q3 due to the impairment changes as well as some small intangible assets being fully amortized. Interest expense increased by $255,000 due principally to increased interest rates. The effective tax rate for the third quarter of 2016 was 36.1% compared to 18.2% in the third quarter of last year. The effective increase tax rate was affected in both periods by the discrete impact of asset impairments. The 2016 rate was largely offset by changes in the company's forecasted global mix of income. The 2016 third quarter net loss was $6 million or $0.58 per diluted share compared to a $57.4 million loss or $5.60 per diluted share in the prior year. Excluding the impairment charges in both…

Thank you [Operator Instructions] Our first question comes from the line of Brent Thielman with D. A. Davidson. Please state your question.

Hi, good evening.

Hi, Brent.

Hello, Brent.

Hey, Bob, on the tubular and energy services segment, I mean a multitude of different headwinds going on there I think in terms of revenue and margins. Can you kind of help parse out between which aspects of the business you are seeing the most pressure on? I guess, I am kind of curious to on that idled facility and how much of a headwind that was for you in the quarter in terms of margin pressure?

Well, the idled facility which belongs to our coated services operation was a significant headwind in the third quarter. We wound up with sales that were very minimal in the quarter, and as result, we weren't covering a number of costs that are associated with that business. So, as we were shutdown in excess of six weeks in the quarter, it had a substantial impact on our results. So the inspection services piece of that continues to struggle and really those two businesses were the ones in the third quarter that were having the most significant unfavorable impact on gross margins. And that business is still down year-over-year, as I mentioned last year, it hadn't hit the bottom. I'd like to say that the bottoms end [ph]. Certainly we've seen an increase in now in rig counts and other activity that I mentioned that's given us some reason for optimism, but I'd like to see that turn into results before we'll talk about how this thing is really turning up. It's those two businesses that have had the most significant impact.

Okay. I understand. And I guess with the coating operation I think it's up and going now, that presumably you should see some margin benefit here I think going forward, is that fair?

It is. Running at this point in time we have some nice backlog in the facility. We're working on a substantial project at the moment that has production schedules filled at least for single shift operations through the rest of the year and in through the first quarter. So I do anticipate that that's going to have better -- contribute to better results in the months ahead.

That's encouraging. And then on the construction product side, the backlog in bridge decking projects, is there some kind of lumpy projects involved in there, or are you seeing somewhat that's a little more sustainable in terms of order trends in that particular area?

Well, the demand in the marketplace actually looks pretty decent at the moment, but that business is always lumpy. If you ever look at it in terms of whether it's bookings or sales from one quarter to the next, it clearly reflects a market where we sometimes have some substantial projects, substantial being $5 million to $10 million size projects where we can see that activity affect our sales output in any given quarter. So as such, while our year-over-year comps at this point and an even on a year-to-date basis this year haven't looked so good, we booked a lot of business in the second quarter. And so, we're getting exit the year with near-record backlog in that that will make the coming quarters here at least the near future look pretty good. But you know, the demand for that sort of product line from us is still decent in the marketplace, but as I always tell people you know there'll be times where it won't go up and down just based on that project activity.

Okay. That's all I had. Thank you.

Yes. Thanks, Brian.

[Operator Instructions] I'm showing no further questions at this time. So that does conclude our question-and-answer session. I will now turn it back to Mr. Bauer for closing remarks.

Okay. Well, thank you that was a light quarter on Q&A. I guess that's okay. We'll look forward to talking with you here at the end of the year when we hold our next conference call. So, we appreciate everyone joining us. Thank you very much.

This concludes today's conference. Thank you for participation. You may disconnect your lines at this time.