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FRA Rejects Dakota, Minnesota & Eastern Railroad's Loan Application

PITTSBURGH, Feb. 27 /PRNewswire-FirstCall/ -- Pittsburgh-based L.B. Foster Company (Nasdaq: FSTR), announced today that the Federal Railroad Administration ("FRA") has rejected the application of the Dakota, Minnesota & Eastern Railroad ("DM&E") for a loan of approximately $2.33 billion to build and rehabilitate approximately 860 miles of railroad in three states.

The FRA acknowledged that the DM&E's application met virtually all of the applicable criteria for such loans, including enhancing public safety, promoting economic development, alleviating rail capacity problems in shipping coal out of the Powder River Basin, and enhancing rail service to small communities, especially in South Dakota and Minnesota. Despite these many benefits, the FRA concluded ... "that there is an unacceptable degree of risk with regard to the project and too high a risk concerning whether the obligations can reasonably be repaid ... "

    Kevin Schieffer, President & CEO of the DM&E, yesterday stated:

    "While DM&E is disappointed in the Federal Railroad Administration's
    decision denying our loan application, we expect to move forward and will
    spend some time assessing alternatives to accomplish that objective.  This
    project is too important to the future of our company, regional rail
    transportation and the many supporters in the agriculture and energy
    sectors, the communities we serve, and beyond who are relying on it."

L.B. Foster Company owns approximately 13.4% of the DM&E's diluted common stock, approximately $8.8M of DM&E preferred stock and, as of December 31, 2006, $7.7M in receivables accrued on this preferred stock. Despite the FRA's rejection of the DM&E's loan application, the Company believes that the total value of its investment in the DM&E significantly exceeds the sum of these amounts.

L.B. Foster Company is a leading manufacturer, fabricator and distributor of products for rail, construction, utility and energy industries. The company can be reached via telephone at 412-928-3400 or 1-800-255-4500 and through its website,

* Statements or beliefs on the value of the DM&E are forward looking statements and are subject to numerous contingencies and risk factors. Readers are encouraged to refer to L.B. Foster Company's report on Form 10-K for the year ending December 31, 2005, as well as other documents filed with the Securities and Exchange Commission by L.B. Foster Company.

SOURCE  L.B. Foster Company
    -0-                             02/27/2007
    /CONTACT:  Jake Fuellhart of L.B. Foster Company, +1-412-928-5645, or /
    /Web site:

CO:  L.B. Foster Company; Dakota, Minnesota & Eastern Railroad; Federal
     Railroad Association
ST:  Pennsylvania

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9316 02/27/2007 15:01 EST