Good day, ladies and gentlemen, and welcome to the L.B. Foster First Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, this conference is being recorded. I would now like to have the conference over to David Russo, Chief Financial Officer at L.B. Foster. Please go ahead.

Thank you, Karen. Good afternoon, ladies and gentlemen, thank you for joining us for L.B. Foster Company’s earnings conference call to review the company’s first 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 our first quarter presentation on our website under the Investor Relation’s tab for those that have online access. This afternoon, Bob will review the company’s first quarter performance and provide an update on significant business issues, as well as company and market developments. Afterward, I will review the company’s first 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 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 opinion 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 any subsequent Form 10-Qs or other pertinent items filed with the Securities and Exchange Commission for additional information about the 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. Reconciliations of U.S. GAAP to non U.S. GAAP measurements have been included within the company's 8-K filing. Statements referring to EBITDA, adjusted EBITDA, adjusted gross margins and adjusted net income are considered non-GAAP measurements, and while they are not intended to replace the presentation of our financial results in accordance with GAAP, the company believes that the presentation of these metrics provides additional meaningful information for investors to facilitate the comparison of past, present and forecasted operating results. With that, we will commence our discussion and I will turn it over to Bob Bauer.

Thank you, Dave. Good afternoon, everyone. Thank you for joining us. I’ll begin by providing an overview of our financial and operational highlights in the first quarter as well as give my perspective on the current market environment, which I will spend most of my time on. And then I’ll turn it back over to Dave to discuss our financial results in greater detail. During the first quarter we delivered sales of a $126.3 million, gross profit margin of 19.0%, EBITDA of $4 million and we had a net loss of $0.28 per diluted share. Each of these results is unfavorable to prior year first quarter results. The combination of a low backlog to start the quarter and weaker than expected bookings led to missing our revenue projection for the quarter, which intern had a significant impact on operating results. The weakness was driven by ongoing challenges we faced in many of the markets we serve including the headwinds driven by the current commodity cycle. While the first quarter is traditionally or seasonally weak as quarter, the year got off to a particularly slow start with order input from the North America freight rail market and highway and other civil construction projects that were well below what we had expected. So profitability in the quarter was impacted by deleverage on lower volume as well as pressure on gross margins, particularly in the tubular and energy services segment. So with a difficult way to start the year, and although we expected a weak start to the year, we were looking for better results in our first quarter. So as I covered our results, keep in mind that the test and inspection services business is still in restructuring mode with a somewhat stabilizing environment. This business is responsible for $0.27 of the…

Thank you, Bob. Net sales for the first quarter of 2016 were $126.3 million, a decrease of 8.4% as compared to $137.9 million in the prior year. Gross profit margin was 19.0%, a decrease of 326 basis points as compared to 22.2% last year. We experienced margin compression across all of our segments in the first quarter. Moving on to expenses, consolidated SG&A increased by $566,000 or 2.5% to $22.8 million due to the costs from businesses that were acquired in and after March of 2015. Excluding the S&A of acquired companies, selling, general and administrative expenses declined by $755,000 million or 3.4%. As a percentage of sales, SG&A increased by 193 basis points to 18.1% driven by the lack of leverage from the lower sales results. Amortization expense increased by $1.1 million to $3.3 million in Q1 due to the acquisitions transacted since March of 2015. Interest expense increased by $557,000 due to increased borrowings related to the acquisitions transacted since March of 2015. Our revolving credit agreement is a $335 million facility currently bearing interest at approximately 2.2% per annum. Other income expense was $715,000 in the first quarter, as compared to other income of $803,000 last year, an unfavorable swing of $1.5 million. $1.3 million of that variance is principally due to the impact of a weaker U.S. dollar relative to the Canadian dollar in the current year. First quarter pre-tax loss was $4.1 million compared to pre-tax income of $6.7 million in the prior year. The $10.8 million reduction in pre-tax income was due to the dilutive impact of the test and inspection services acquisition, as well as the increased interest and amortization cost and a reduction in rail segment revenues and related profitability due principally to last June specific revenues as well weaker freight rail…

Thank you. [Operator Instructions] And our first question comes from the line of Mike Baudendistel from Stifel.

Thank you. First I just wanted to ask you, I don’t think you said anything about the guidance that you drew out there the last quarter. Are you withdrawing the guidance today?

Mike, no we’re not withdrawing it. We elected to provide a lot of commentary on the outlook to provide as much in size as possible with respect to have the first quarter unfolded as well as a lot of color I think on how the rest of the year actually looks. We felt like with one quarter behind us we were not going to go ahead back and revisit the subject. I think as you can see, we got off to a slow start of course, we missed that estimate that we put out there for Q1 but we felt like that we needed to watch the year unfold a bit more before commenting further on exact numbers and circling back on any of the estimates that we could put out there last quarter.

Okay. And I guess also wanted to ask you, you talked about some of the expenses you’re cutting related to other types of cost reductions or securing new business. And I know you mentioned SAP is one area where you’re cutting, what are some of the other areas that you’re cutting, can you give any detail there?

Well, largely what’s taken place is that we’re making reductions in facilities, we have some salary headcount reductions that are taking place. We have a number of discretionary budgets that we can look at all across the company, most of the funding that is in place for new product development and those sorts of things are staying in place. And the programs that are important with regard to what we want to fund in the new acquisitions those are also staying in place, but similarly if we can cut it in capital spending as well so differing equipment, machinery those sorts of things and there is always cost associated with putting those sorts of things in place. We’re holding a line on facility improvements and replacement of items, and even the things you go after like travel expenses and those sorts of things. So, it’s one of those situations where everything is on the table at this point, given the softness that we’re seeing in the market and the way profitability targets are going to be real challenge this year. So, as I said, if it’s not about getting new business then we’re going to question whether or not we want to spend that money.

Okay, that’s a good detail. I guess I also wanted to ask you just on SG&A, can you talk a little bit about how much you expect that, I assume it’s going to come down from $22 million in the most recent quarter to going forward. Are you able to quantify how much you could raise if that’s good to go?

You want to take that Dave out, because you can bring a number.

Yeah. So Mike, all the things we’re looking at, a lot of or I should say some of it rolls up in G&A and some of it obviously doesn’t not, there is a lot of the cost we’re looking at that roll up in cost to good sold. So if you take a look at our first quarter run rate related to SG&A we’ve certainly expect Q2 to be less than Q1 as these things begin to take hold and show. We may incur some cost as we move along, taking some of these actions but we look at the first quarter run rate, we certainly expect Q2 to be down – there are some costs like sales commissions that will could bump up in the summer months as our construction season kicks in and commissions are earned but we expect our numbers to start to drop. So we don’t have a target for you right now, we’re still working on pulling some of that together.

Well, one of the things that is also impacting that Mike, is the added cost year-over-year for the expenses we’re incurring with the litigation of Union Pacific particularly time matter. So that’s a substantial headwind to SG&A that’s causing that number to look like it’s not falling at the rate that you would anticipate it might.

Yeah, I would tell you Mike, our Q1 actual SG&A was negatively impacted by $900,000 related to the litigation.

Okay, great, that’s helpful. And then I just also want to ask you a revenue question, I mean you break out now revenue between goods and services, I guess the $18 million in services – I assume that’s mostly in energy and rail, is it possible to just break that into the segments and also do you have a higher margin on the services segments and any just specific initiatives that to grow at the services revenue?

Well, we do have certainly plans to grow that. You’re right, the preponderance is in energy. Just the entire upstream business that was purchased last year, the test and inspection business all was primarily is all services. Our coated products business, I should say our coated services business is really all services as well, so those two really are the preponderance of it but there is other parts of the rail business that is serviced as well.

Okay, thank you. That’s all I have for you this afternoon. Thank you.

Yeah, thanks.

Thank you. [Operator Instructions] Our next question comes from the line of Brent Thielman from D. A. Davidson.

Hi, good morning, guys.

Hi, Brent.

Hi, Brent.

I apologize I missed a portion in the opening commentary, so don’t mean to be repetitive but on the civil side and some of your comments there, some other kind of the materials were talked about for better growth in the first quarter in the civil construction projects. I’m kind of wondering whether the timing issue or you’re starting to see some improvement in that market coming to you, any help there?

Yeah, I wouldn’t pin it on timing, I think the construction market in general, the heavy civil construction market that we depend on is not changing a great deal. We were impacted actually more than in Q1 by our free cash concrete products, we just missed sales because bookings were good. So, there isn’t a lot of impact to our piling and bridge business coming from timing of projects in construction as it relates to the market moving. We also always depend on winning a few big orders and right now great decking orders for our bridge business we need to book a few decent size orders before the end of the year. And our big issue with piling really stems from how competitive that you come out as piling products have gotten, and what I put into that category is pipe pile on each pile. Our ability to win those projects these days has been affected by how low steel prices have gotten and how some mills will be very aggressive when it comes to winning some of those projects. And so consequently we have lost some share in commodity piling products.

Okay. And then on the tubular, energy services side I mean I understand the business is difficult, profitability some respects to holding that relatively well. How do you feel the business did relative to your expectations for the quarter?

It performed lower but not by much for the quarter because we thought we were at a point where the business was somewhat stabilizing. I can’t say that I still do feel that way and I’m saying that because we’re no longer seeing a decline on a slow compared to what we were seeing throughout 2015. So it does feel like we are bumping along the bottom, I thought we would do a bit better in sales volume. So we did miss what we had forecasted for that business in Q1. And we have some improvement forecast for the balance of the year, certainly in the second half. Most of what you’re hearing in the market place is there is expected to be some improvement, most people are expecting that balance of supply will start to come in much closer to demand in the second half and there’ll be some price movement. So that’s why we put some improvement in our forecast but as I mentioned we’re going to operate as if we’re not expecting a lot of it and continue to go add a lot of the costs and other things that we can do to try to protect the bottom line.

Okay, thank you.

Yeah.

Thank you. [Operator Instructions] And that concludes our question-and-answer session. I would like to turn the conference back over to Bob Bauer for any closing comments.

Okay, well thanks everyone for joining us. I hope we added color on how the market looks both in Q1 and what we think is shaping up here over the coming quarters is helpful for you. We will look forward to talking with you again after the second quarter. So, thank you for joining us today.

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program and you may now disconnect. Everyone, have a good day.