Foster Raises 2026 Sales Outlook After Third-Quarter Rebound

The Tip Desk · November 11, 2026 · 4 min read

Net sales reached $168.0 million, up 21.5%, reversing the second-quarter 3.5% year-over-year decline.

L.B. Foster Company (FSTR), a global technology solutions provider of products and services for the rail and infrastructure markets, reported third-quarter net sales of $168.0 million, up 21.5% from a year earlier, reversing the 3.5% year-over-year decline recorded in the second quarter.

The rail-and-infrastructure company said the rebound was broad across both reportable segments. Rail, Technologies, and Services sales rose 32.3% to $102.9 million, while Infrastructure Solutions sales increased 7.6% to $65.1 million.

Adjusted EBITDA increased 15.1% to $13.1 million after a 4.7% year-over-year decline in the second quarter. Operating income rose 21.5% to $10.1 million. Net income attributable to the company grew 55.4% to $6.8 million, which the company attributed to improved operating income, reduced interest expense, and a lower income tax expense.

Gross profit expanded $3.4 million, or 10.8%, to $34.4 million. Gross margin compressed 200 basis points to 20.5% from 22.5%, after expanding 80 basis points to 22.3% in the second quarter. The company said the margin decrease was primarily attributable to business mix within Rail, reflecting stronger sales growth in the lower-margin Rail Distribution and UK businesses. Selling and administrative expenses as a percentage of sales declined 190 basis points to 14.1%.

Within Rail, Rail Products sales increased $24.4 million, or 54.6%, on higher volumes across all Rail Products businesses. Technology Services and Solutions sales rose 22.7% on short-term project work in the UK. Those gains were partially offset by a 9.0% decline in Global Friction Management, which the company tied to project timing as certain projects were executed in the first half of the year. Rail gross profit margin fell 320 basis points to 19.6% on that mix shift. Rail segment operating income increased 33.8% to $7.9 million.

Infrastructure Solutions sales rose on Precast, up 9.0%, and Steel Products, up 4.1%. Infrastructure gross profit margin was 21.9%. Segment operating income increased 5.4% to $4.4 million.

Consolidated new orders, net increased 35.7% to $155.8 million. Infrastructure new orders, net rose 141.6% to $68.7 million, driven by growth in Steel Products, including a $19 million order that was cancelled in the prior-year quarter, and a 29.5% increase in Precast. Rail new orders, net were $87.1 million. Backlog declined 5.1% to $234.7 million, with Rail backlog down 9.8% and Infrastructure backlog up 1.0%. The company said the sequential backlog decrease of $11.4 million, or 4.6%, was primarily due to higher sales volumes and seasonally lower order activity. The trailing twelve-month book-to-bill ratio was 0.98 to 1.00.

Cash provided by operating activities totaled $23.6 million. Total debt as of September 30, 2026 was $28.7 million, down $19.3 million during the quarter. The company said the reduction reflected strong free cash flow generation and lower working capital requirements. The Gross Leverage Ratio per the credit facility was 0.6x, down from 1.6x a year earlier.

President and Chief Executive Officer John Kasel said the company started the second half with strong momentum in sales, profitability, and cash generation, and that it continues to see healthy customer demand, particularly across Rail Distribution and the UK businesses, driving year-over-year growth in new orders and supporting an increase in the full-year sales outlook.

Full-year 2026 net sales guidance was raised to $570.0 million to $590.0 million from $540.0 million to $580.0 million. The Adjusted EBITDA range was narrowed to $42.0 million to $45.0 million from $41.0 million to $46.0 million. The Free Cash Flow range was increased to $20.0 million to $28.0 million from $15.0 million to $25.0 million. Capital spending is expected at about 2.0% to 2.2% of sales.

On October 28, 2026, the company completed the acquisition of the operating assets of the residential wastewater precast business and the Aeris aerobic treatment systems platform of Dulworth Enterprises Inc. for approximately $52.2 million. The company said revised guidance assumes no material impact from the acquisition and excludes purchase accounting adjustments and transaction-related costs. Kasel said the company remains focused on disciplined execution, cash generation, and integrating Dulworth as it enters the final quarter of the year.