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L. B. Foster Company Reports Continued Strong Earnings Improvement in Third Quarter

L. B. Foster Company (Nasdaq: FSTR), a leading manufacturer, fabricator, and distributor of rail, construction, and tubular products, today reported that its third quarter earnings per diluted share from continuing operations increased to $0.32 from $0.21, a 52% increase, the seventh consecutive quarter the Company has recorded an earnings increase over the prior year quarter.

2006 Third Quarter Results

In the third quarter of 2006, L. B. Foster had earnings per diluted share of 34 cents and net income of $3.7 million compared to 22 cents per diluted share and net income of $2.3 million in the third quarter of 2005. The Company reported $0.3 million of income from discontinued operations, which reflects the winding down of our former Geotechnical Division, that was sold in the first quarter of 2006. Diluted earnings per share from continuing operations were 32 cents on earnings of $3.4 million compared to 21 cents on earnings of $2.2 million in 2005.

Net sales increased 5% to $95.9 million compared to $90.9 million in the prior year quarter.

Gross profit margin was 14.5%, up 260 basis points from the prior year quarter primarily as a result of increased billing margins.

Selling and administrative expenses increased $0.9 million or 13% over last year's quarter due primarily to employee related costs and benefit expenses. Third quarter interest expense increased $0.1 million over the prior year due to increased interest rates and increased borrowings. The increase in borrowings was due primarily to an increase in working capital requirements as well as higher than typical capital investments made during the past three quarters. The Company's income tax rate from continuing operations was 32.2% in the third quarter compared to 31.5% in the prior year quarter.

"Rail Products continued to deliver strong sales and more importantly, improved gross profit margins. Our concrete tie business results improved over last year due to strong activity at our Spokane and Grand Island facilities. Our precast buildings business also contributed significantly improved margins on moderately increased sales and our Fabricated Products Division continued its improvement over last year's third quarter as well as the first two quarters of this year," remarked Stan Hasselbusch, President and Chief Executive Officer. "We are also pleased to report that our Tucson concrete tie facility has recently ramped up production of concrete ties as it nears the completion of its commissioning period," added Mr. Hasselbusch.

2006 Year-to-Date Results

In the first nine months of 2006, L. B. Foster had income from continuing operations of $7.7 million or 72 cents per diluted share compared to $4.4 million or 42 cents per diluted share for the first nine months of 2005. Income from discontinued operations for the first nine months of 2006 was $2.8 million which includes the gain on the sale of our former Geotechnical Division of $3.0 million, reduced by a $0.2 million loss from operations and wind down costs. The discontinued operations income tax provision was favorably affected by the release of a valuation allowance recorded in 2003 related to a capital loss carryforward.

Net sales for the first nine months of 2006 increased 12% to $279.3 million compared to $249.3 million in 2005. Gross profit margin was 13.3%, up 190 basis points from the first nine months of 2005, primarily as a result of increased billing margins.

Selling and administrative expenses increased $3.5 million or 16% over the same prior year period due primarily to employee related costs and benefit expenses. Interest expense increased $0.6 million over the prior year due to increased interest rates and increased borrowings. The Company's income tax rate from continuing operations was 31.3% compared to 32.5% in the prior year.

Cash used by operations was approximately $7.0 million for the first nine months of 2006, due to an expected ramp up in activity in anticipation of a seasonally strong spring/summer period, however third quarter cash generated from operations was $7.3 million. Capital expenditures for the first nine months were $12.8 million as we have substantially completed the construction of our Tucson concrete tie facility.

Mr. Hasselbusch concluded, "Overall business activity remains strong and is reflected in our third quarter order bookings. Bookings for the first nine months were $344 million, 24% higher than the same period last year. Backlog at September 30, 2006 was $171 million, 62% higher than last year, which we expect to translate into a strong fourth quarter."

L. B. Foster Company will conduct a conference call and webcast to discuss its third quarter operating results on Thursday, October 26, 2006 at 11:00 am ET. The call will be hosted by Mr. Stan Hasselbusch, President and Chief Executive Officer. Listen via audio on the L. B. Foster web site: http://www.lbfoster.com, by accessing the Investor Relations page.

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 that could affect the Company's profitability include, but are not limited to, general economic conditions, adequate funding for infrastructure projects, the potential value of the Dakota Minnesota & Eastern Railroad, delays or problems encountered during construction or implementation at our concrete tie facilities, and the continued availability of existing and new piling and rail products. 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.

Contact: Stan L. Hasselbusch

Phone: (412) 928-3417

FAX: (412) 928-7891

Email: investors@LBFosterCo.com

CONDENSED STATEMENTS OF CONSOLIDATED INCOME

L. B. FOSTER COMPANY AND SUBSIDIARIES

(In Thousands, Except Per Share Amounts)

Three Months Nine Months

Ended Ended

September 30, September 30,

2006 2005 2006 2005

(Unaudited) (Unaudited)

NET SALES $95,868 $90,915 $279,336 $249,260

COSTS AND EXPENSES:

Cost of goods sold 81,978 80,079 242,197 220,952

Selling and administrative

expenses 8,245 7,316 24,661 21,194

Interest expense 892 778 2,415 1,775

Other income (322) (478) (1,186) (1,205)

90,793 87,695 268,087 242,716

INCOME FROM CONTINUING OPERATIONS

BEFORE INCOME TAXES 5,075 3,220 11,249 6,544

INCOME TAXES 1,635 1,013 3,524 2,125

INCOME FROM CONTINUING OPERATIONS,

NET OF TAX 3,440 2,207 7,725 4,419

DISCONTINUED OPERATIONS:

INCOME FROM DISCONTINUED OPERATIONS 495 206 3,196 232

INCOME TAXES 237 65 357 77

INCOME FROM DISCONTINUED OPERATIONS,

NET OF TAX 258 141 2,839 155

NET INCOME $3,698 $2,348 $10,564 $4,574

BASIC EARNINGS PER COMMON SHARE:

FROM CONTINUING OPERATIONS $0.33 $0.22 $0.75 $0.44

FROM DISCONTINUED OPERATIONS 0.02 0.01 0.27 0.02

BASIC EARNINGS PER COMMON SHARE $0.35 $0.23 $1.02 $0.45

DILUTED EARNINGS PER COMMON SHARE:

FROM CONTINUING OPERATIONS $0.32 $0.21 $0.72 $0.42

FROM DISCONTINUED OPERATIONS 0.02 0.01 0.26 0.01

DILUTED EARNINGS PER COMMON SHARE $0.34 $0.22 $0.98 $0.44

AVERAGE NUMBER OF COMMON SHARES

OUTSTANDING - BASIC 10,510 10,150 10,360 10,101

AVERAGE NUMBER OF COMMON SHARES

OUTSTANDING - DILUTED 10,872 10,534 10,780 10,453

L. B. Foster Company and Subsidiaries

Consolidated Balance Sheet

(In thousands)

September 30, December 31,

2006 2005

ASSETS (Unaudited)

CURRENT ASSETS:

Cash and cash items $3,764 $1,596

Accounts and notes receivable:

Trade 50,407 44,087

Other 480 1,354

Inventories 80,410 67,044

Current deferred tax assets 1,779 1,779

Other current assets 1,219 703

Prepaid income tax 2,901 582

Current assets of discontinued

operations - 3,867

Total Current Assets 140,960 121,012

OTHER ASSETS:

Property, plant & equipment - net 49,891 38,761

Goodwill 350 350

Other intangibles - net 83 144

Investments 16,429 15,687

Deferred tax assets 1,228 1,183

Other non-current assets 384 177

Assets of discontinued

operations - 1,554

Total Other Assets 68,365 57,856

$209,325 $178,868

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Current maturities on long-term

debt $2,169 $1,759

Short-term borrowings 8,059 5,881

Accounts payable-trade and other 45,643 41,087

Accrued payroll and employee

benefits 5,410 5,875

Current deferred tax liabilities 4,845 4,845

Other accrued liabilities 2,002 3,710

Current liabilities of

discontinued operations 285 1,760

Total Current Liabilities 68,413 64,917

LONG-TERM BORROWINGS 30,625 20,848

OTHER LONG-TERM DEBT 9,773 8,428

DEFERRED TAX LIABILITIES 1,615 1,615

OTHER LONG-TERM LIABILITIES 4,134 3,071

STOCKHOLDERS' EQUITY:

Class A Common stock 105 102

Paid-in Capital 39,698 35,598

Retained Earnings 55,877 45,313

Treasury Stock - (126)

Accumulated Other Comprehensive

Loss (915) (898)

Total Stockholders' Equity 94,765 79,989

$209,325 $178,868

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