PITTSBURGH, Oct. 5 /PRNewswire-FirstCall/ -- L.B. Foster Company ("Foster") (NASDAQ:FSTR), today announced that on October 4, 2007 a subsidiary of Canadian Pacific Railway Limited ("CP") consummated its merger with the Dakota Minnesota and Eastern Railroad ("DM&E"), in which Foster held a minority equity interest.
In exchange for its DM&E preferred stock, warrants and common stock, Foster received approximately $148.8 million, with an additional $2.15 million being deposited into two escrow accounts to secure certain of the DM&E's obligations. As a result of this payment, Foster will record a pretax gain on the sale of its investment of approximately $122.9 million in the fourth quarter and will record incremental dividend income of $8.5 million in the third quarter.
In the future, Foster also may receive approximately $41.6 million if CP commences construction of the Powder River Basin ("PRB") expansion, and up to a maximum of approximately $84 million if CP attains milestones related to PRB coal tonnage thresholds. These "contingent payments" are estimates and are subject to interest and/or inflation adjustments and certain rights of offset. Foster and other former DM&E shareholders have transferred their interests in their respective "contingent payments" to a limited partnership which will oversee the collection and distribution of any such "contingent payments". The CP has stated that it may take several years to determine whether to proceed with the PRB expansion.
L.B. Foster Company is a leading manufacturer, fabricator, and distributor of products for the rail, construction and utility and energy markets with approximately 30 locations throughout the United States.
The Company wishes to caution readers that various factors could cause the actual results of the Company to differ materially from those indicated by forward-looking statements in news releases, and other communications, including oral statements, such as references to future profitability, made from time to time by representatives of the Company. Specific risks and uncertainties include whether or not the CP will proceed with the PRB expansion and whether the CP will attain, even if it does proceed with the PRB expansion, various PRB coal tonnage thresholds. Matters discussed in such communications are forward-looking statements that involve risks and uncertainties. Sentences containing words such as "anticipates," "expects," or "will," generally should be considered forward-looking statements. More detailed information on these and additional factors which could affect the Company's operating and financial results are described in the Company's Forms 10-K, 10-Q and other reports, filed or to be filed with the Securities and Exchange Commission. The Company urges all interested parties to read these reports to gain a better understanding of the many business and other risks that the Company faces. The forward-looking statements contained in this press release are made only as of the date hereof, and the Company undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
L.B. Foster Company
415 Holiday Drive, Pittsburgh, PA 15220
Contact: Lee B. Foster II
Phone: (412) 928-3417
FAX: (412) 928-7891
Email: DATASOURCE: L.B. Foster Company CONTACT: Lee B. Foster II of L.B. Foster Company, +1-412-928-3417, fax, +1-412-928-7891,
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