L.B. Foster Company Price & Performance (FSTR)

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 These forward looking statements reflect our opinions only as of the date of this and we undertake no obligation to revise or publicly release the results of any revisions [indiscernible] 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 carefully read our disclosures and reconciliation tables provided within today's earnings release and presentation as you consider these metrics. So with that, let me turn the call over to John.

Thanks, Lisa, and hello, everyone. Thank you for joining us today for our fourth quarter earnings I'll begin my remarks on Slide five, covering the highlights of the quarter. First of all, let me say we're very pleased with how we finished 2024 with solid profitability and strong cash generation. In the second half of twenty twenty four. These results are a clear indication of our strategic playbook and execution over the last three years are translating to improving economic profit generation. In the fourth quarter, gross margins of 22.3% were up 100 basis points over last year on 5% lower sales. Highlighting the improved profitability of the portfolio. Adjusted EBITDA of $7,200,000 was up 1,100,000.0 or 18.7%. With lower SG and A expenses delivering the improvement versus last year.

In line with our normal working capital cycle, we also delivered a strong quarter of cash generation. With operating cash totaling 24,300,000.0 noting that $49,000,000 was generated in the second half of twenty twenty four. Cash from Q4 was deployed primarily to reduce our net debt in the quarter by $20,900,000 to $44,500,000 at quarter end. As a result of lower debt levels and improving profitability, our gross leverage ratio came in an impressive 1.2 times.

This is an improvement from 1.9 times at the start of the quarter and 1.7 times from last year. Highlights from the full year results are on Slide six. Reported sales of $530,800,000 were down 2.4% as a result of divestiture activity while organic sales were up modestly. In line with our strategy, gross margins expanded 160 basis points 22.2% despite the lower sales. The improved gross margins increased adjusted EBITDA 1,800,000.0 to $33,600,000 for the full year. Solid operating cash flow in the quarter allowed us to reduce debt, improve leverage and make progress on our stock buyback program with 2.7% of outstanding shares repurchased in 2024. We also finalized the Union Pacific settlement funding in 2024. Improving cash generation by $8,000,000 per year going forward. All in all, I'm very pleased with our team's accomplishments and the progress we have made four. Our disciplined execution of our strategic playbook has positioned us well and we're optimistic about the prospects for continuing growth in 2025 and beyond.

Bill will now cover the financial details for the quarter and year. As well as an update in our capital allocation priorities. Which includes a new $40,000,000 stock buyback program. I'll come back at the end with some closing remarks on our markets and outlook for 2025. Over to you, Bill. Thanks, John. Good morning, everyone. I'll begin my comments covering the fourth quarter highlights on Slide eight. As always, the schedules in the appendix provide more information on our financial results including the non GAAP reconciliations.

Net sales of $128,200,000 declined 5% in the fourth quarter due to an organic sales decline of 3.8% driven by the 14.2%. Despite the lower sales, gross margins expanded 100 basis points to 22.3% due to improved profitability in the Rail segment. SG and A costs in Q4 were 24,400,000.0 down $2,800,000 from last year due to lower personnel costs and lower bad debt expense in The UK resulting from a $1,000,000 charge taken last year.

Restructuring costs of 500,000.0 and a $1,700,000 charge related to the settlement of our U. S. Defined benefit pension plan were both excluded from Q4 adjusted EBITDA.

Adjusted EBITDA for the quarter was $7,200,000 up 18.7% versus last year due primarily to the lower SG and A expenses. Operating cash was strong at $24,300,000 up $2,600,000 over last year's fourth quarter.

This year's result included a $800,000 in funding and $1,800,000 to terminate The U. S. Defined benefit pension plan. I'll cover the deployment of operating cash along with some additional color on performance by segment later in the presentation. Slide nine reflects the organic and [indiscernible] last year. We continue to realize improved profitability year over year from our pork [indiscernible] as well as improvements in our legacy businesses. Despite the lower organic sales in the quarter, our legacy businesses contributed a strong increase in EBITDA due primarily to the lower operating costs. The Bridge Grid Deck business continues to wind down which is also contributing to improved profitability year over year. Slide 10 highlights the favorable impact on margins over a longer time period.

Reflected here, our quarterly sales and gross profit over the last two years.

We continue to realize improved margins year over year driven by an improved sales mix.

Our focus on driving organic growth within Railtec Technologies and Precast Concrete is translating into higher margins and greater economic profit generation on slightly lower sales in recent quarters. We expect this trend to continue in line with our strategic playbook with a focus on driving organic sales growth. In 2025. On the next couple of slides, I'll cover the key drivers of segment results for the quarter. Starting with Rail on Slide 11, fourth quarter revenues totaling $79,200,000 were up 14.2% over last year. The entire increase was organic and driven by higher volumes in rail products, friction management and total track monitoring product lines. In addition to the higher sales, rail margins of 22.2% were up 300 basis points versus last year. The improved margins were driven by the strong segment volumes, coupled with improvements in our higher margin growth platforms as well as the ongoing recovery of our business in The UK. Fourth quarter rail orders decreased by 8.5% driven by softer orders in rail products. Rail backlog was down 26% year over year in large part due to our strategy. The decline was realized entirely in rail products and our UK business.

We continue to limit investment in The UK despite some improvement year over year. Partially offsetting the decline was a 53.4% increase in backlog for Global Friction Management. Turning to Infrastructure Solutions on Slide 12 segment revenue decreased $16,600,000 or 25.2% due to soft market conditions in the steel products business. Most notably our pipeline coating product line. Prospects for improvement for this product line will be covered in John's market outlook section later on.

Freecast concrete revenues were down 3.4% versus last year with Q4 last year being an exceptionally strong for our CXT Buildings product line. Gross margins were down 90 basis points to 22.6% due to lower sales volumes and unfavorable business mix within steel products for the quarter. Precast concrete margins of 25.7 Infrastructure orders were 52,200,000.0 up $6,800,000 over last year with the increase realized entirely within the Protective Coatings product line. Highlighting the improving outlook. Backlog totaling 123,500,000.0 was down $5,900,000 primarily due to a $6,800,000 fine.

Precast concrete backlog increased $3,600,000 versus last [indiscernible] I'll briefly cover the highlights for the full year on Slide 13. Organic sales were essentially flat for the year with the 2.4% reported sales decline due to divestitures. Rail organic sales growth was a solid 5.4% but offset primarily by lower organic sales in steel products within infrastructure. Gross profit improved $6,000,000 while gross profit margins of 22.2% improved 160 basis points. As a reminder, 2023 gross profit was adversely impacted by $4,200,000 from the Bridge Grid deck exit while twenty twenty four gross profit includes a $800,000 gain, on a property sale completed in the second quarter. The balance of the margin improvement is due to business portfolio changes in line with our strategy. Coupled with overall favorable business mix, and pricing initiatives. SG and A expenses decreased $1,200,000 from the prior year. The decrease is due to lower employment and bad debt expense partially offset by higher restructuring legal and professional service costs. 2024 adjusted EBITDA was 33,600,000.0? Up $1,800,000 compared to last year driven by both improved margins and lower SG and A expenses. I'll now cover our liquidity and leverage on Slide 14, Net debt declined $20,900,000 during the quarter to to $44,500,000 driven by the operating cash flow of $24,300,000 in the fourth quarter.

We've consistently managed our leverage and debt levels in line with our business profitability and other capital needs. We believe this is a strength of the business given our capital light [indiscernible] As John mentioned in his opening remarks, the Union Pacific settlement was fully funded in December. The $50,000,000 obligation paid over six years with $8,000,000 paid in 2024 is now behind us.

Its resolution provides a significant boost to our financial It's worth noting that the 2024 free cash flow adjusted for the UP payments and other non recurring items was approximately $25,000,000 representing an 8% yield at today's spot price. Our strong cash generation also allowed us step up the pace of our stock repurchase program in 2024. I'll cover the new stock repurchase authorization along with other capital allocation priorities on Slide 15. Our previous $15,000,000 authorization Since the program's inception, we repurchased 435,000 shares or approximately 3.8% of common stock outstanding utilizing total proceeds of $9,100,000 through December of I should note that we also repurchased a approximately 111,000 shares in 2025, bringing total repurchases under the expired authorization up to 545,000 shares or approximately 4.8% of shares outstanding. On 03/03/2025, the Board authorized a new three year $40,000,000 share repurchase program that will expire at the February. Share repurchases are an important capital allocation priority for us especially with the improving prospects for cash generation and current attractive valuation. We plan on continuing to invest CapEx in our facilities at a rate of approximately 2% of sales with a focus on organic growth initiatives within our growth platforms.

We also continue to evaluate tuck in acquisitions to add breadth to our overall growth platforms. And finally, we will remain prudent with our leverage and net debt levels with the goal of maintaining leverage between We finished 2024 with gross leverage 1.2x which was a low point in recent years. Our working capital needs are greatest in the first half of the year and our debt levels and leverage will be elevated during this period. However, we've consistently demonstrated that we can manage through these normal seasonal cycles and maintain our financial flexibility while funding other capital allocation priorities. My closing comments will refer to slides sixteen and seventeen covering orders, revenues and backlogs by business.

The book to bill ratio at the end of Q4 was 0.95 to one up slightly from last quarter.

Rail order rates have begun to recover with the trailing twelve month book to bill ratio at 0.94 to one including a 3.2% increase in friction management orders in Q4. Higher orders across the steel products and precast concrete businesses drove the improved infrastructure ratio at 0.97 to Steel product orders were up 65.8% with strong intake levels in protective coatings. Precast concrete orders were also up 1.6% in the fourth quarter. And lastly, the consolidated backlog reflects reflected on Slide 17 was down $28,000,000 or approximately 13% from the record high levels seen last year. With both segments experiencing declines. It should be highlighted that the lower backlog and related book to bill ratio below one are in part due to our strategic playbook. The Rail segment backlog is down $22,000,000 Over half of the decline is in our U. K. Business as we continue to scale back initiatives in The UK market in line with our The balance of the decline is in our rail products business in part due to the lower market steel prices. Backlog for the friction management product line was up $3,800,000 or 53.4%.

Infrastructure backlog is down $5,900,000 or 4.6% with the entire decline due to steel products. Pretty TAS concrete backlog $5,000,000 decline in steel products backlog is due to lower demand levels across the business unit as well as $2,700,000 from the product line exit activities. In summary, despite the lower backlog levels, we remain optimistic in the outlook for profitable growth with our focus on driving demand generation and our growth [indiscernible] Coupled with an expected recovery in our Protective Coatings business, which John will cover in his closing remarks. Thanks for the time this morning. I'll now hand it back to John. Thanks, Bill. I'll begin my closing remarks by covering the near term outlook for key end markets on Slide 19. Phil mentioned that our overall backlog is down 13% versus last [indiscernible] So let me impact that a bit more. To begin with, over half of the backlog you decline is due to our continued strategic playbook actions as we focus on expanding our more profitable work programs [indiscernible] or scale back parts of the business that consume working capital that are not generating economic profit that we would like to see. In our core growth areas, backlog is up year over year in friction management precast concrete 53.44.6% respectively.

And while total track monitoring backlog is down versus last year, We're seeing increase in quoting activity that should translate into order book [indiscernible] in this product line. These trends should translate into improved sales of efficiency continuing to 2025. As a reminder, we had an exceptionally strong first quarter last year, particularly in our Rail segment, which is normally softer at the start of the year due to adverse weather conditions. But the 13% lower backlog this year and the volatile macro environment we expect to start to 2025 to be softer versus last year. However, we believe demand from our core end markets should continue to support growth over the medium and long term cycles. With the increasing focus in Braille on safety operating fish We expect steady demand in our Rail segment to continue especially for Rail Technologies [indiscernible] of the portfolio With the current activities in Washington, D. C, we are monitoring the status of the government funding programs previously approved supporting investment in rail infrastructure. Our markets are also absorbing the threat of tariffs, particularly related to steel. And we are taking steps to align supply chain to build inflexibility where possible to navigate the choppy conditions that may be ahead.

For Infrastructure business, we see a couple of favorable trends worth highlighting. As mentioned before, precast concrete backlog is up and we continue to ramp fulfillment capacity in Tennessee and Florida operations. Construction demand in these markets continues to be and we believe the growth drivers will remain largely intact. The commissioning of our Central Florida facility remains on track and we're seeing interest continue to grow in our Virocast wall system solution. We expect production to begin in this facility by the end of the first first quarter with initial orders already in hand. Also within infrastructure, the renewed interest in U. S. Oil and gas is translating to increasing demand and favorable outlook for our pipeline coating product lines. Noting that protective coating orders were $8,600,000 Q4, up from $1,400,000 last year. As you recall, this product line has been depressed over the last four years and we're optimistic. That the favorable demand development will continue throughout 2025. In summary, as I mentioned earlier, while we expect the start to 2025 to be a bit softer than last year, we believe we are well positioned to benefit from infrastructure based investment plans for years to come. On Slide 20, you'll note our investment thesis remains unchanged as we move into 2025.

The strategic steps we've taken to reposition our portfolio continue to manifest improved sales efficiency economic profit generation. As a result of our strategic choices, we've been able to simplify the business portfolio and narrow our investment in growth platform and precast concrete. The multiple year infrastructure investment super cycle we expect in the coming years should translate to state robust growth in our platforms. Our strategy execution along with our capital light business continues to drive strong cash generation. Which should expand further in 2025 with the completion of the Union Pacific settlement payments behind us. And of course, improved profitability outlook. And finally, we continue to allocate capital to maintain financial flexibility while also driving growth and shareholder returns. In summary, we're confident that our strategy is sound and our investment thesis entered by these four pillars is compelling. And as a result of that, we have authorized a new three year $40,000,000 stock repurchase program. [indiscernible] I'd like to close today's call by covering our 2025 financial guidance found on Slide [indiscernible] As you may recall, we announced our refresh strategy in the [indiscernible] We made significant progress through 2024 and are guidance for 2025 is with the strike distance of the goals we established over three years ago.

Importantly, when these goals were established in 2021, they contemplated significantly more risky portfolio changes than we completed. What we realized along the way is that our portfolio as exists today and after nine transactions completed over the last three years, can deliver the goals we established without the higher risk. Namely capital intensive acquisitions. The midpoints of our sales and EBITDA guidance for 2025 represent a reasonable 5.5% organic sales growth, but the more robust 34% adjusted EBITDA [indiscernible] driven by sales mix, Of course, M and A is an important capital allocation and opportunities for tuck in acquisitions aligned with our growth platform. But let me remind you that our current focus is driving organic growth programs. Which should continue to accelerate our profitability expansion. In 2025 and beyond. And lastly, while the current environment is a bit choppy, we believe these conditions will stabilize and the much needed infrastructure investment drive demand and growth in our markets. In closing, I'd like to highlight that 2024 represent the best safety year the company has ever seen. We are devoted to nurturing our cultural care by taking proactive measures that emphasize the safety and well-being of our employees and communities.

Our employees understand the responsibility of making choices that will safely and positively impact themselves and others. By making safety a priority, In this environment together, we achieve more and drive positive change. So with that important closing note and statement on safety, I'm very pleased with our team's accomplishments over the last three years and look forward to continuing the journey in 2025. Thank you for your time and continuing interest in LV Foster Company. I'll turn it back to the operator for the Q and A session. Our first question comes from the line of Julio Romero from Sidoti and Company. Your question please. Great. Thanks. Hey, good morning, John and Bill. Thanks for taking questions. For joining us. Absolutely. Good to be here. My first question is on the twenty twenty five guidance ranges for sales and EBITDA. That imply sales growth of about six about 5.5% at the sales midpoint and 34% at the EBITDA midpoint. If you could just speak to the puts and takes that could get you to the high and low end of your ranges?

Yes. Well, obviously, what's going on in the markets today is obviously a little choppy. So we got to kind of find our way through that. But where we feel very, very strong is we're we've really been pivoting the company in the last couple of years is with technology innovation. Specifically on our rail side.

So our condition monitoring business that we have, which is with the wild applications that we have and the rockfall applications, and soon hopefully be announced other products. It really gives you an opportunity to uplift our not just our sales activities, Julio, but also the margins. Come with us. So that's where we're really feeling good about as the year progresses. And all the work that we did last year with managing our SG and A As you recall, we did a 7% reduction in [indiscernible] most of it was the back office support. So we're going to see some nice leverage with sales and profitability for the balance of the year. So we're going to land probably somewhere in between there. But what we feel the best about is the revenue we're seeing in the coming months is going to continue maintain those nice profitability margins. We're over 22% oil Just a few years ago, we're struggling trying to get to 20%. So we've done a lot of hard work and that's a lot of it's related technology innovation that we brought bringing to the marketplace today.

Excellent. Great context there. And then you mentioned the wheel impact low detection systems. Can you maybe just talk about what can drive increased market adoption of some of those offerings within the rail segment that are a little techier strike monitoring, etcetera? And does the recent transportation incidents are kind of in the headlines call attention as selling customers for the need to prioritize safety.

Yes. So in my remarks here, I talked about the the rail space is operating safer and more reliable that's what this stuff does. It gives them the opportunity to really understand their relationship was happening with the railcars and what's going on with the track conditions themselves. So if there is an issue, gives them the early warning indication of being able to do something. So they can really focus on their [indiscernible] and their distance between the the trains themselves, dwell time. So much of the devices are in the marketplace today really are something that signals something that some defect or something has already occurred Our product tells when early detection warning. So the railroads have really picked up on this. And we have the largest installed base here in North America. Of this product line and we're really excited about the opportunities that we see continue to increase the installed base with the with the introduction of our new Mark IV product that we brought to the marketplace last [indiscernible] Things are looking very well there because of Our customers really understand the value we're bringing to them today of of helping them run more effectively and efficiently.

So going back to my earlier comments, we see these uplift in margins. This is a good example of product lines that we're bringing in that will give us opportunity to really change our portfolio as we move forward. And more profitability comes with that.

Very helpful. One more for me and then I'll hop in the queue. Just on the free cash flow just now that the union settlement is in the rearview, just what's the biggest swing factor to your cash flow going forward?

Yes. So we got $20,000,000 to $30,000,000 and we ended up $22,000,000 this year, right? And I think at one time, Bill and I were talking about zero to five. And we really, really had great working capital performance and just managing cash in the second half, specifically in the fourth quarter. This company does an excellent job. The operating people have done a really, really good job many, many years of really getting after cash, cash generation. And I know that's one of the things that excites the investor by, But there is some choppiness that comes with it too. As we see an uplift and we're going to have that in Q2 and Q3, related to some working capital buys that we need to do, right? So we've got quite a bit of work coming. And what I didn't mention before is all the infrastructure work that we So if you just look at what's going on precast, today and our continued expansion or legacy work as well as what's going on in Tennessee, And now with our new operation in Florida, we're going to have to fund those organic programs with working capital. So we're going to have to manage that cash.

And I think the cycle will look similar to what last year was significant improvement towards the end of the year as we manage the close of the year. But with the Union Pacific behind us, that was six years in the making of of staying close to them, managing the settlement payments, But I'll tell you what we came out of that a much better company. And I think Union Pacific is also recognized the value we brought to them in the business today is as better as it's ever been. So we're looking for not just what we've done in the past with them, but how do we continue to grow that business. And really two different companies than where we were even six years ago. So we're mindful of what's going on in cash flow.

We like the fact that we hit 1.2 times at the end of the year. For 1.7 times where we started year over year and 1.9 at the start of the quarter. So something that is really a strong lever for us in the company of keeping that in front of us and continue to manage and have the cash be something that is something that's very, very important to us as well as continuing with [indiscernible] So that's the thing that we always have to manage our way through there. We're very excited about this three year $40,000,000 program of continuing to invest in the company and purchase back these shares. That's how strong we feel about where we're at today and more importantly where we're heading. And the cash will be reflective of that as well.

Excellent. Thanks very much. I'll pass it on. Thank you, Julio.

Thank you. And our next question comes from the line of Chris Sakai from Singular Research. Your question please. Yes. Hi. Good morning, John and Bill.

Hi, Chris. Hi, Chris.

So can you help me understand, I mean with these new steel tariffs coming on, how will this be how will this affect your backlog going forward? How should we look at that? Well, the backlogs intact, we feel good about that, right?

The nice thing is, we've seen these tariffs before, Chris. I really appreciate the question. Back in 2017 with the two thirty two tariffs and So we've been down this road before and our relationships with our domestic steel mills It's excellent. So the good news for L. B. Foster and the investors at L. B. Foster is we pretty much have What we need to get, we have those quantities and tons pretty much allocated and going to be sitting there for us this year. The question is where does the price flow through? What does the demand look like on these mills really to other product lines But we're as far as backlog, we're going to execute that backlog and a lot of times, there are in the past these tariffs, it really just steal itself was a good thing for L. B. Foster Company and I'm looking for the same thing to happen. Second half of this year as well.

Okay, great. And then for protective coatings, how high do you think that number could go?

I don't know. All I know is what I shared with you the $1,800,000 to all those additional over $8,000,000 that we've seen just in the fourth quarter year over year basis. We're a constant contact with the mill itself, namely a ZIP code was [indiscernible] And they are quoting a lot of work and they're booking a lot of work in their two steel mills right now. So we are wrapping up our operation. We have hired about 55 people in the last sixty days.

So we are looking to be running almost at full capacity here starting at [indiscernible] All that translates to what the revenue is going to look like between now and then years yet to be seen, but we're feeling very, very good about getting out of that trough that we've been in the last four years in that business and really driving some nice profitability out of that facility as well as where we have in our Willis specialty coating business as well. So both are looking very good here.

Okay.

And then For the $40,000,000 share buyback, what made you decide on $40,000,000 Yes. Yes, well, we had to pick a number. To start with, right? And we came off of $15,000,000 So Bill and I kind of talked back and forth. We worked with our Board of Directors. We looked at the union Pacific, that cash coming back and how can we take a a good portion of that cash we're not going to be spending related to settlement fees and bring that into the repurchase program. So that just seemed a good fit, right balance with the monies that we see that we're going to generate in operating cash as well as that additional cash that's coming in.

Okay. And last one for me. Will you come out with a new four year plan?

We will come out with a three year plan.

Related to aspirational goals we'll stick to three years.

Okay, sounds good. All right, Chris.

Thank you.

Thank you. And our next question comes from the line of Justin Bergner from Gabelli Funds. Your question please.

Hi, good morning.

Good morning, Justin.

Good work on the business and I guess my questions, John, would be around the precast concrete use in national parks state parks I mean, we're seeing some potential disruptions there, shall we say, How are you factoring that into your guidance and outlook?

For '25.

Well, it might I guess with the earlier questions, when you start looking at the $540,000,000 to $5.80 That may have some impact of moving towards the lower end of the guidance related to that activities. But I'll tell you, Justin, we did $80,000,000 alone in that that business last year, which is the best year we ever had The Great American Outdoors Act which is running for another year or so related to the funding, we're still in very, very good shape related to the work we have, the work in our backlog, and shipments that we're looking at making here in the next few months.

So I'm not we're actually not as concerned about that as perhaps we could or maybe on other things that are happening today. That one looks still pretty good. Got you. All right. And then in terms of the recovery in the second half versus the first half, like what parts of business are you banking on bouncing back?

Yes, good question. So our business, we didn't see as much as this last year and it was in our remarks, Bill and I, is And our business is seasonal and a lot of that's related to just getting budgets approved and as well as weather conditions. So where we really, really strive is in the second and third quarters And then in greater than fourth quarter to more in the first quarter So we're seeing this to be a much more typical year, if you will, I think once these When we get through the tariffs and all those other government actions too, they'll settle down here. I expect that to settle down in the coming months hopefully. But I do think the second half of the year related to the backlog we have, all the quoting activities we have all the protective coatings work that's coming our way that we haven't seen in four years, all the work that's coming out of Florida with our new operation, all the work coming in Tennessee related to CXT is really, really shaping up to something that we've feeling very good about because the country needs infrastructure. They need infrastructure materials, And right now, I think we're very well positioned to be able to deliver on those things.

Being that much of what we do is, first of all, is here in America. And second of all, how much of the materials we get come from America as well. [indiscernible] I think we're It's not keeping me up at night, let's put it that way, Jeff. Justin. I think we have opportunities to really pull together a good year and hit this financial guide we have out there. As long as we can't control everything, but right now what we see is we're managing what what we can manage We're doing well.

Got you. And then lastly, on the tariff side with respect to tariffs against Canada and Mexico, could that create any chill for your [indiscernible] business?

Sure. It always can. We do work in Canada. We work in Mexico. We have We have customers in Canada and in Mexico. But these tariffs and these other things have been talked about for a while and our our business people have done a good job working with the end users end markets there and we've had quite a bit of work that's been flowing between the countries leading up to what happened last night or early this morning related to tariffs. So I think everybody's mindful of what's going on. At the end of the day, the customers both Mexico and Canada want our product, need our product. We will continue to find a way to get in product [indiscernible] we're going to continue to make product in line with everything we're having our backlog and be able to we should be able to pass pricing on as well if there is increased pricing because our contracts are allowing to do for us to do that. And we're have quite a bit of flexibility the way I'm seeing before. Coming out of COVID, really this organization really pivoted.

We really got after our contracts. I really understood that what was really driving in material costs and other things. So we have an opportunity now to go get price when costs increase. We feel pretty good about that. All right. Thank you.

Thank you. And our next question is a follow-up from the line of Julio Romero from Sidoti.

Your question please.

Hey, guys for taking a few follow ups for me. Sure. On the restructuring, are all the costs related to that taken already in 2024 how much savings were realized in 2024 and how much incremental savings in 2025 do you expect relative to what you got in 2024?

We appreciate that question. We spent a lot of time really mapping that out and fact, we took six months to really peel back the onion of what we needed to do there. And then we also took monies and then we pivoted towards our technology innovation engineering side.

Of the company and as well as the technical sales side. And I'll flip that over to Bill and he can give you some details on actually how those numbers are translating what they mean this year. But I wanted just from a strategy point of view, that was a key point of really getting ourselves positioned for this profitability expansion that we have in 2025. Yes. Hey, Julio.

So yes, in 2024, the total charge that we took was right around $1,000,000 I think it was about a half million dollars that we realized in Q4. As well. In terms of the split between Q3 and Q4, Funding wise, we spend about $800,000 in 2024. There's a little bit of cash that will come out in 2025. But in terms of P and L charges, nothing more that we would expect in 2025. And then in terms of realized savings based on the timing of when employees left the organization, we realized about $2,000,000 worth of savings in 2024. And we expect our run rate savings from the program to be about $4,500,000 So you would expect an incremental $2,500,000 in 2024 sorry, 2025 over 2024.

Great. Thanks so much for the color there. And then one more for me is just can you maybe level set for us what percentage of each segment currently is related to growth Maybe what percentage of the consolidated L. B. Foster as a whole falls under the growth bucket? And then if you could to the best that you can, speak to some of the organic growth rates embedded in those buckets that each should be getting in '25?

Appreciate the question. So I'll start and then just give you a little color on the strategy. I mean, we have growth coming out of both segments, first and foremost. So we feel good about that. We got quite a bit in the infrastructure as we talked about what's going on in Florida. The expansion that's going on in Tennessee and both locations right now. As well as we've got some nice programs going in Texas. On the infrastructure side, really building out our precast abilities that we have there. On the rail side, it's all about TTM and the condition monitoring that we mentioned. We've been talking about specifically product like the Mark IV, the rockfall applications that we have There's really a renewed interest on some of the other products we have, especially with Union Pacific. Settlements behind us where we're adding more [indiscernible] components to the marketplace today that we haven't seen in quite a while. And of course, the big thing that basically went from zero to 100 is predictive coatings right now.

With the in line oil and gas pipe that we're doing 12 to 24 inches pipe distribution pipes that we're we're going to be coating and putting in the marketplace for the balance of this year. And we we honestly see that activity continue for multiple years. You want to add a little color as far as the actual numbers, what that represents?

Yes. I think Julio, you know we talk about the business as segments, but then we also break down those platforms in some details in our materials. So I would characterize our growth platforms at about $230,000,000 in '20 and the balance of the business about $300,000,000 would be our returns platforms. And I think you're probably familiar with what those groups are. And we're thinking about growth rates for 2020, '5 The return platforms are going to be kind of low single digit. Numbers, low single digit growth rates. What I would tease out of that is the coatings business, which is part of the the returns platform, we would expect that to be maybe [indiscernible] emphasis on the energy investment here in The United States that's come back into play here somewhat in recent months. And then on the growth platforms, we look at high single digits, low double digits in terms of growth rates. With the expectations of primarily within friction management seeing greater growth [indiscernible] You mentioned the wild programs that we've got deployed in TTM. That will be a higher growth rate as well. And then very importantly, the precast concrete business with the investments we've made in our Tennessee operations, market growth opportunity there, as well as the investments we made in Florida, we expect to see sales growth to be a little healthier there as well.

Hopefully that helps.

It does. Definitely appreciate the granularity. Thanks very much.

Thank you. [indiscernible] this does conclude the question and answer session of today's program. I'd like to hand the program to John Castle for any further remarks. Thank you, Jonathan, and thank you for joining today. I'd just like to close at Once again, with just a shout out to all the OB Foster team members. That made we challenged the company back in 2024 to be not just good at safety, but world class as a release of safety. See how we look at it is if you take care of your people, they take care of the process and the profits come. And when safety is good, the business is good. And we were we were outstanding in 2024. We went for a long period of time, months, quarters on end, but not even one injury in the company. [indiscernible] for a company that's been around since '21 That's really said something. What we've been able to what we've been able to accomplish.

And I think it really to the investors out there, either investing in company today or future investor, when L. B. Foster puts our mind to something, and we go out and say we're going to do something, we deliver. Last year when Bill and I after the second quarter, we talked about profitability that we're going to come in the second half of the year. We talked about the cash we're going to generate second half of the year. And we delivered. We delivered on what we said after a tough second quarter.

And we're here to say that we're going to deliver on what we have in 2025 and beyond. Strong operations and what we're seeing through their safety program is extremely exciting. And again, it just represents who we are more importantly what we are and how we do things. So thank you.

For joining us today. And look forward to catching up with you after the second quarter.

Thank you, ladies and gentlemen, for your participation in today's conference.

This does conclude the program. You may now disconnect. Good day, [indiscernible]