New L.B. Foster CEO puts company on track to grow
After more than 30 years of work in the manufacturing world outside Pittsburgh, Bob Bauer marked a partial homecoming Feb. 1 when he became CEO of L.B. Foster Co.
A native of Pittsburgh's Larimer neighborhood, Bauer earned his bachelor's degree in materials science and engineering from Penn State University in 1980. He began his career in Charlotte, N.C., working for Westinghouse Electric Co. for six years; moved to Houston and Milwaukee with Allen-Bradley for eight years; and then to Columbus, Ohio, with Emerson Electric from 1994 until last year.
"I know what it's like to move into a new company and learn it from scratch," Bauer said. "And here's an opportunity to be the CEO of a company that's in fine shape."
His mission with the Green Tree rail products company: "Hit the accelerator on growth," said Bauer, 53, most recently president of Emerson's division in Columbus, where he still lives.
L.B. Foster mainly provides products and services worldwide such as rail, concrete ties, and rail fasteners and joints. The segment accounted for 56 percent of the company's $163 million in sales for the July-September quarter. The period included a profit of $9.7 million, a 49 percent jump.
The rest of the company's sales come from construction products -- such as steel piling, bridge decking and railings -- for bridges, highways and buildings. The company produces coated tubular products for energy and utility markets.
Over the decades, construction crews incorporated L.B. Foster products into such landmark projects as the Brooklyn Bridge and the Panama Canal. More recently, the company supplied 470 tons of rail, related fasteners and special track work for the North Shore Connector transit line soon to link Downtown with the North Shore.
According to the Association of American Railroads, freight railroads will invest a record $13 billion in capital expenditures in 2012 to expand and upgrade infrastructure.
"We don't know if that spending will be on infrastructure or rail cars, but the fact that major railroads are spending money is a clear positive for L.B. Foster," said Brent Thielman, senior research analyst for D.A. Davidson & Co. in Portland, Ore.
Bauer said he expects to increase company revenue through acquisitions, including targets in emerging markets; investments in technology and product innovation; and providing customers more after-market services.
He said "the likelihood is good" L.B. Foster will notch an acquisition "in the next 12 to 24 months."
"Broadening our geographic footprint around the world in growth markets would be high on the priority list," Bauer said.
"They have been generating good cash flow, so they have the firepower to do it," Thielman said. He suggested, for example, that Foster might acquire a fill-in product line in rail or tubular products.
Bauer succeeds Stan Hasselbusch, 64, who was with L.B. Foster for 36 years. He announced in early 2011 that he would retire around the end of the year as CEO but remains a consultant to the company for 2012.
Hasselbusch's tenure included the December 2010 acquisition of Portec Rail Products Inc. in Fox Chapel, for $113 million. The deal was the largest in L.B. Foster's 110-year history and provided the company with a U.K. launch pad for business in Europe. Hasselbusch declined to comment for this story.
"Europe is not as meaningful a driver for them as North America, but it's a platform for potentially expanding their business," Thielman said.
Bauer said the company will eye under-served emerging markets but has limited expectations about Europe, given its focus on reducing sovereign debt, rather than spending on infrastructure.
Much closer to home, Bauer and his wife, Nickie, are focused on relocating to the Pittsburgh area.
"We're going to start looking for a home here immediately," he said.Additional Information:
About L.B. Foster Co.
Headquarters: Green Tree
Employees: 835, including 130 at headquarters
CEO: Bob Bauer
Business: Rail and other products and services for the rail industry; steel products for the construction, energy and utility markets
Revenue: $475 million (2010)
Earnings: $20.5 million
Locations: 10 plants, 12 sales offices, seven company yards
Top executives: David Russo, senior vice president and chief financial officer; Samuel Fisher, senior vice president, rail products; Donald Foster, senior vice president, construction products