Good day, and welcome to the First Quarter 2022 L.B. Foster Earnings Conference Call. After the speakers ' presentation, there will be a question-and-answer session and instructions will be given at that time. As a reminder, this call is being recorded. I would now like to turn the call over to Stephanie Listwak, the company's Investor Relations ' Manager. You may begin.

Thank you, Operator. Good morning, everyone, and welcome to L.B. Foster's First Quarter of 2022 Earnings Call. My name is Stephanie Listwak, the company's Investor Relations Manager. Our President and CEO, John Kasel, and our Chief Financial Officer, William Thalman, will be presenting our first quarter operating results, market outlook, and business development this morning. Sean Reilly, the company's Corporate Controller, is also joining us this morning. We'll start the call with John providing his perspective on the company's first quarter performance and updating you on significant business matters and market development. Bill will then review the company's first quarter financial results. John will then provide perspective on company outlook and his closing comments. We will then open the session up for questions. Today's slide presentation along with our earnings release and financial disclosures were posted on our website this morning and can be accessed on our Investor Relations page at lbfoster.com. Our comments this morning will follow the slides in the earnings presentation. Some statements we are making are forward-looking and represent our current view of our markets and business today, including comments related to COVID-19. 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 Securities Laws. For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and presentation. We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and reconciliation tables provided within today's earnings release and within our accompanying earnings presentation carefully as you consider these metrics. For the purpose of helping you understand the underlying performance of the company, we will be referring to adjusted EBITDA, adjusted net income, adjusted diluted EPS, net debt, and adjusted net leverage ratio during the presentation today, as reflected in the reconciliation tables included in the appendix to the earnings presentation. Additionally, in September of 2021, we announced the asset sale of our Piling Products division. Due to the nature of the sale, we have presented the Piling Products within continuing operations within our financial statements, but we have adjusted certain metrics as annotated in our presentation slides to reflect the sale for purposes of an even comparison. So with that, let me turn the call over to John.

Thanks, Stephanie and hello, everyone. Thanks for joining us today for our First Quarter earnings call. I'll start the call with some opening remarks on developments within the business in Q1. Despite headwinds we faced in the quarter, overall, we are encouraged by some of the positive trends realized by the business. Specifically, order intake levels, excluding the Pilings business increased 17.7% over the prior-year quarter and increased 42.2% sequentially. This order intake level resulted in the backlog of $245 million a quarter end, an increase of 3.7% compared to prior-year quarter. The strength in orders in our current backlog shift positions well for improving revenues as 2022 progresses, including expected sequential increase of at least 25% in Q2. Reflecting the improving commercial environment, we also delivered year-over-year revenue growth in Q1 which was up 3.7% versus last year after adjusting for the Piling sale. While the commercial markets continue to improve, the operating environment remains challenging. And our margins were impacted by inflationary pressures and disruptive supply chains in the quarter. However, our margins began to stabilize in the quarter and we expect to see improvements in the profitability in the coming quarters as volumes continue to improve and our mitigation actions take hold. Working capital levels are elevated versus last year with expected improvement in revenues ahead, and efforts to ensure product availability for customers in the challenging supply market. We remain focused on our strategy to leverage our key growth platforms. Precast concrete and Rail Technology services will be making our progress on our execution road map. While we are facing challenges in the quarter, we believe the potential upside in our markets and focused strategy will have us well positioned to drive and improving shareholder returns in the coming years. Bill will cover the detailed financials for Q1, and I will come back at the end with some closing remarks on our outlook. Over to you, Bill.

Thanks, John and good morning, everyone. I'll begin my comments by covering the consolidated highlights of our first quarter on Slide 7. Note that the schedules in the appendix provide more detailed information on our financial results, including the non-GAAP measures Stephanie referenced. As a reminder, our piling business was divested in September last year and is not being treated as a discontinued operation. Accordingly, the amounts presented today include the piling business within the Steel Products and Measurement segment, unless otherwise noted as adjusted for comparability purposes. First-quarter sales were $98.8 million, down $17.3 million or 14.9% from Q1 last year. However, adjusting for the Piling divestiture, sales were up 3.7% year-over-year. Gross profit was down in Q1 due to the piling divestiture coupled with raw material and labor inflation, as well as labor and supply chain disruptions impacting the balance of the business. Gross profit margins were up 40 basis points on a reported basis due to the piling divestiture. However, gross profit margins adjusted for piling were down 190 basis points year-over-year. I would highlight that the 16.6% reported Q1 gross profit margin compares to 16.9% in Q4 of 2021. So the rate of margin declined sequentially has eased some in the current quarter. We are implementing price increases to mitigate the impact of inflation on the business where possible. And some parts of the business have been more successful than others, given contractual and competitive considerations. However, we expect to see further progress from our pricing and margin improvement actions, and believe we will see margins increase as we continue through 2022. EBITDA in Q1 declined $1.1 million to $1.7 million with 300 thousand due to the Piling divestiture and the balance due to lower gross profit and slightly higher SG&A costs in the remaining business.…

Thanks, Bill. Please turn to Slide 15, where we'll start closing remarks with a brief overview how we see our key end markets developing the coming quarters. As previously mentioned during update call, our business has have benefited from significant government funding of infrastructure projects in the past. And the funding levels approved over the last two years are greater than we ever seen before. While it's difficult to predict the magnitude of the impact on our markets and demand for our products, we're optimistic we'll be seeing improving demand. As previously mentioned, our order, intake levels, and backlog have positioned us to expect sequential revenue growth, at least 25% moving into Q2, it's important to mention that we do not expect to see any meaningful revenue from the infrastructure investment and Jobs Act in 2022. We would expect revenues from this funding program to come in 2023 and beyond. However, we do have line of sight a significant infrastructure projects across the portfolio that are well aligned with our growth strategy. Our energy-related businesses appear to have bottomed out at historical low levels of demand. While there is some increased discussion around energy security in the market today, as well as some increased order activity in our measurement businesses, we do not expect to see a meaningful improvement in the demand of our energy related products lines for the seeable future. Addressing the erosion, our margins remains a top priority for us. We're being aggressive where possible with pricing actions to being creative in solving labor in supply chain constraints and disruptions. We are adding inventory where appropriate to reduce the impact of supply chain disruptions and then defining alternative sourcing arrangements, too.

[Operator Instructions] Our first question comes from Chris Sakai with Singular Research. Your line is open.

Hi, good morning.

Hi, Chris.

Hi, Chris, how are you?

Good. Good.

Good.

Just a question on, I guess, new orders in the precast segment. There was the decline there. Can you comment on that and where you see the new orders next quarter?

Yeah. Thanks, Chris. When you look at comparison over the quarters, Q1 to Q1, there was a little bit of a down tick, but that's because we received a very, very large order in Q1 of 2021. So -- in fact, that was $11 million order that went over multiple years. So we actually feel very good about where we stand on the precast side of the business. And Backlog, as we stated, ended at $72 million, which is an uptick from where it was at the same point in time with that very large order back in Q1 of 2021. Orders are coming in from all over, both industrial, commercial accounts, national and State federal parks. The infrastructure, Bill, we haven't seen any work there, but great American Outdoors Act has been a fantastic stimulus for us. We're receiving just a great amount of extra -- well I don't know if extra is the right word, but quite a bit of funding and focused into our state national parks, so the business looks strong.

Okay. Great. And I didn't get the [Indiscernible] with the slides. But was there a backlog for coatings and measurement? How is that going?

So well, as we mentioned, right, as I'd mentioned in the script, Bill has some commentary too. We definitely have hit the bottom, as it relates to that particular business. And we are seeing as significantly more compared to where we were in the second half of last year as far as bidding activities. When you look at -- we really break it out into the entire group, the Steel Products and Measurement so that backlog stands at 49 million, which is just 3 million off a where it was at the same period last year. So we are pretty flat at year-over-year basis with more bidding activity in the coding side than we've seen in the past.

Okay, great. Thanks for the answers.

Your welcome. Thanks for joining us today.

Again, if you'd like to ask a question, [Operator Instructions]. I'm not showing any additional questions. I'd like to turn the call back over to John F. Kasel for any closing remarks.

Thanks, Michelle. And thanks to everybody joining us today. We really appreciate everybody's focus on where we are as a company. We feel very good about where we're at related to our [Indiscernible] backlog of $245 million and the emphasis of growing revenue by greater than 25% heading into Q2. We stand behind that, and we're anxious to get into the quarter and have a strong second half of three quarters of the year. Thanks everybody for joining us today, and we look forward to hooking up with you after the end of next quarter. Take care, and be safe.

This concludes today's conference call. You may now disconnect. Everyone, have a great day.