on our organic opportunities to bring shareholder value and return. Company's been around now for 122 years. So the first hundred years they ran without me. They did pretty well. But you know, we're really a great company, a great culture. It was a family company for a long, long period of time. Lee Foster just stepped off the board just a number of years ago, and that was the last remaining Foster. But it's about legacy and tradition. We're based out of Pittsburgh, Pennsylvania. We're one of the few companies that actually manufacture anything, distribute, and resell things in Pittsburgh area, so we're very proud about that as well. But that's really our story.
We manufacture, distribute, and we serve the industrial markets and transportation, specifically rail, both freight and transit, and then the civil works, specifically with our concrete and steel products. We're gonna talk quite a bit about that. So joining me today is Bill Thalman, as Jack mentioned. Bill came to the company in twenty twenty-one. He was a big part of where we're at today, and we really needed to shore up the CFO side and the C-suite side, so we're really focused on driving shareholder value and return. The business is set up in two segments, the Rail Products, Rail Technologies. We like to always say technology and services, reality is this is the rail segment. We just want to remind people we're a technology company now, more than just a product company, and track component company.
Then Infrastructure Solutions, which is basically everything else. Rail side represents 60% of what we do, 60% of the revenue, that is. Everything you see that we typically do is in North America. In fact, 90% of the sales is here in North America. We do some things outside North America where it makes sense, but our real focus and drive is here in North America. So I want to leave with you, and we're gonna keep hitting these messages a couple of times in the next 20 minutes or so. I say true strategic transformation on the way. A lot of heavy lifting is behind us. We're gonna have a really, really strong second half of the year. And there's a lot of noise, a lot of mix.
When you look at our company, you're like, "What in the world has been going on in the last couple of years?" We had to go fix things. We had to get back to what the value once that we did. We took a little bit of hit in the first quarter related to some of the free cash flow, or lack thereof, related to building up some of the things we need to do for a strong second half of the year, but it's really put our company in a really strong position right now for value and valuation of our company and free cash flow that we're gonna be generating. We'll talk more about that, and profitability expansion. We're gonna talk a lot about what we're gonna do over the next year.
That's really not a destination, it is a journey. We are gonna talk about 29% H2 to H2 growth in the second half, and then, 12% growth year over year. But it's not about that, it's about where we're gonna take the company and what our strategy is driving us and where we're going. So if I was sitting where you are, you'd say: Why are we Foster? You know, what's, what's the real value? Why should you be interested in the company? Well, first of all, we've done a lot of heavy lifting with our portfolio.
We took a step back, we looked at the market, we looked at what we really have been working hard in the last couple of years with the management team, and really focused on what it is, what it is we do well, and why, and how we are shareholder value. So we took some, you know, businesses have been around for a long period of time in our company. Thirty, forty years are no longer with our company, but just didn't make sense. The growth wasn't gonna be there. We'll talk more about that. Organic drivers, we're not gonna be wagering the company and spending a lot of money on M&A right now. We don't need to. We got things in our wheelhouse. We're very, very happy with what we have. It's about executing right now and making these things happen.
Free cash flow, we're talking about $25 million -$30 million we're gonna generate in the second half of this year. Cash is everything to us. Even the management team, we get evaluated and judged on cash that we generate. We have done a good job in the past generating cash, and we will continue to give you favorable cash flow. It's something you can count on. Being a construction company, that's not that easy, 'cause you have ebbs and flows, you have seasonality. But we feel comfortable that we're gonna continue to give a strong cash position. We don't spend a lot of money, what we do, in these organic programs I'm talking about. So about 2.5% of sales right now is back in capital to grow the company.
That's not a lot of money for the type of business we do. So a lot on this chart, the most exciting thing to Bill and I was about getting liquidity and getting volume back up in our shares. We needed to get back in the Russell 2000. We were removed from that a number of years ago, and you can see down on the bottom right-hand corner here, our shares have stepped up significantly, so now we got some liquidity. In fact, we're up about four times, if you look, Q2 over Q2. So we're happy about that. I talked about the valuations. We'll get more into that. Bill will get into that more. You can see our guidance that we're sharing here, related to free cash flow, and then what our goals look like.
We're gonna continue with that free cash flow in 2025 and beyond, including EBITDA growth. Not a lot in the past, but I think it is important. You know, I think you, when you want to look at a company, you want to look, does a company management team know what they're doing? And are they really focused on what it is that they do and do well, and can they continue to deliver? I'll tell you, this is where we were in 2021, got us focused. We reshaped our board. In fact, we got a new board of directors. We asked everybody to leave with the exception of one. We brought in Ray Betler , who's the CEO of Wabtec, another Pittsburgh-based company, rail company, that transformed that company.
And then we brought in other individuals that are experts in their field that really help us drive our strategy. We came up with a strategy, we came up with a playbook, we said what we're gonna do, and we've been working on that. So we had a lot of things, a lot of headwinds in our face back in 2021, but the actions we have taken are really focusing on the company, and the value we believe is here today and will continue into the future. So, you know, this isn't on the McKinsey playbook, but it is something that's just common sense. When you forget the segments and how we report, we simplify the business really simple.
Do you, are your businesses as a cash driver, bringing cash to the company that we can invest in other areas and growth? The answer is, you'll see that on the right-hand side. So a lot of our legacy businesses here are good cash generation. To generate their SG&A is relatively low. They continue. They're very, very, you can count on. Rail Products, $200 million this year, will be $200 million next year, and they generate a lot of cash. Good businesses. Our UK business has been doing similar in the steel products business. I was asked earlier, why don't you get rid of some of these businesses? Well, we need them. We need them to fund the growth that we're doing on the left-hand side of the page here. Global Friction Management, we're number one player.
Now, the market is not a large market; it's $150 million, but we are the market leader in this, and this is something that we're looking at. We're really defining this market and market space. We're very excited about... The customers are now coming to us and saying: "We need your products to have a more efficient railroad, to have lower emissions, to keep our trains on the track." This is something that's never really happened before, and this is an evolution, the change in our company, of bringing technology innovation that wasn't there before. Total Track Monitoring is something that we've been doing for a while, but we really didn't come into focus until trains started leaving the tracks, and people in crossings were hurt or killed. So we have the ability to really dictate what's going on.
If a track is fouled, meaning is there an obstacle on it, could lead to derailment. If something is running out of specification on a train, you give them early warning so they can do something about it, and not end up in a town that we saw here in East Palestine, Ohio, and cause you know a really sad situation. Nobody wants that to happen, and it's not good for the business or industry. Excuse me, and the Precast Concrete is really something we've been really, really excited about. We learned about this type of work 25 y ears ago.
We got into the tie business, which was a pre-stress business, and this little business came along with it, and we took this little operation from Spokane, Washington, and now we're all throughout the United States and the Southeast. And this is where a significant part of our growth is gonna be coming from. And why is it exciting? You can see what the actual numbers look like here. On the right-hand side is the returns. So on the returns is where we've been making our portfolio moves. These are items that, you know, have been commoditized per se, and a lot of leverage buying power from our customers. And we're dealing with Class I railroads that have a lot of buying power. So we continue to manufacture these type of things.
They're things that bring us other types of business, but they generate cash. So you see the rail products. You got our U.K. business. I heard a gentleman just talking about the U.K. U.K. has been a very good market for us, but right now they're going through a, you know, tough time over there. I think they've had four prime ministers in the last five years, and things are starting to stabilize there. But we're keeping a watch why, and it's not really part of our growth trajectory right now. But a lot of the innovation, the technology that resides in U.K., as well as Western Europe, is in North America, but it should be. This is where our technology innovation is becoming from. So it's a key part of our strategy and bringing that technology innovation elsewhere, especially out of there.
Steel products, same thing. It's an area of business that we still like. It has an opportunity if pipelines become in favor in North America. That's been a big part of our profitable portfolio in the past, so we're gonna hang on to that business for right now. On the left-hand side, though, is where our growth is coming from. This is organic. This is where stuff out of the Global Friction Management will continue to redefine the market with 24.5% growth in the last three years. Small businesses, condition monitoring thing, and I talk about keeping trains on the track and not derailing and not make sure that you're running into cars, pedestrians. It's up 300%. It's a small business, it's a small base, but it's significantly growing with nice profitability.
You see on the bottom of the chart here, you're talking about 25%-45% gross margins on this business. And same true with Precast. We did make an acquisition, two years ago. We're excited about that, and we're continuing to grow that, but everything we're doing now is about brownfielding, continuing to grow, specifically in the East and Southeast part, parts of the U.S. But we like those margins, and those are the margins that are sitting in our backlog today. So it's not something we aspire to go get, it's something we have. Now we need to go deliver on that. That's why that when I talk about our second half of the year being so strong, it's because we have it. Now it's about delivering it. So talking about having it is funding. You know, I know it's squirrely out there.
We all know what's going on. There's a lot of monies out there coming through IIJA, the Great American Outdoors Act, CRISI grants . There are a lot of money that needs to be spent that is trickling through very slowly, mind you, but the infrastructure needs don't go away. On this page, it's just $10 billion of funding that's out there, and we're starting to see it quite a bit. Our bidding activity is way up, and our backlog is increasing. A lot of this is starting to flow through the government and the state and local authorities. We're excited about that. I'll turn it over to Bill for a financial review, and I'll come back with the closing comments. Bill?
Thanks, John, and thanks again for everyone joining us today. A few slides on what we've been doing in terms of transforming L.B. Foster, as John mentioned. The 2021 playbook was very clear in terms of what we should be doing to reshape the portfolio and get us to a better position to drive growth and profitable growth with improving returns. So we were very focused on divesting businesses that were no longer appropriate for our portfolio, and we did five transactions over that timeframe. And at the same time, we also completed four acquisitions in our growth platforms, specifically rail technologies and precast concrete.
And as you can see, the growth and the profitability profile of the business evolved quite nicely over that timeframe, and you can see it even better on this slide. This is the trailing twelve months for the last two years in terms of sales growth and margin expansion. You know, more recently, there's been a bit of a plateauing on terms of the top line because of some of the divestiture work that's been done. But the margin expansions continued to grow, and as you can see, we've gone from 16.9% about two years ago, all the way up to 21.4%. And with our second half outlook, we expect that profitability expansion to continue to grow.
So we feel like we really have changed the profitability profile and the growth trajectory of our portfolio, and we think with the infrastructure investment that's coming here in the U.S., in particular, will be a strong tailwind for that to continue in the future. John had mentioned earlier about our EBITDA in the first half and second half, and we wanted to put this slide together to paint a very clear picture of what we're seeing in terms of what's transpired for the first half of the year, as well as what our expectations are for the second half of the year. So we had a strong start to the year in our first quarter, but our second quarter was a little softer than we expected to start.
It was below Street guidance expectations that had been established by the analysts that cover us. But, you know, the first half of the year, we did have 5% organic growth, but the top line was flat when it comes to the first half of the year on top line. And as a result of that flatness, primarily with the rail distribution business being a bit softer, coupled with some of the costs that we incurred associated with the restructuring action that we completed in August, our profitability was down 7% in the first half of 2024.
But if you look at the guidance that we've put forward for the full year and taken the implied growth rates that reflects in our second half outlook, you can see our top line is still a little bit softer. That's largely due to some of the divestiture work that we've done, completed last year, as well as continuing softness in rail distribution. But the profitability profile of the business is up substantially. So you can see we're growing nearly 29% on EBITDA in the second half of the year, and the full year growth is 11.7%.
You know, the second quarter was a bit of a soft patch for us, but we're very excited about the growth prospects for the second half, and we think that that tailwind will continue moving into twenty twenty-five as well. With that comes cash generation, which this business is susceptible to some lumpiness, frankly. We experienced a bit of that in our first half, as well as what we're projecting for the balance of the year. It doesn't change the story with respect to our cash generation as a company. Frankly, we've got some timing issues associated with when the business is expected to transpire for the balance of the year, which will end up resulting in some higher working capital requirements than what we originally expected in our original guidance.
But as a result, you know, that just means that's a push of cash into the first half of 2025. That business doesn't go away. That cash isn't being burnt. It's just hung up on the balance sheet in the form of higher receivables. Over that two-year period of time for 2023 and 2024, we've generated $22 million, on average, of free cash flow, excluding our Union Pacific obligation, which ends at the end of this year. We have one more payment to make on that, and it's about $4 million. So, you know, we're targeting cash flow generation of $25 million -$30 million in the second half of this year, and a range of $25 million -$35 million next year for the full year.
And that's a very attractive yield, about 15%, free cash flow yield at today's stock price. So, a little bit of a road bump in terms of cash generation relative to the guidance that had been previously expected, given, but you know, we're very confident that we'll be able to manage that over time, and we feel good about the prospects in the future. Capital allocation. We're really disciplined in terms of our approach to capital allocation. As John mentioned, you know, previously, long time ago, there had been some missteps on acquisitions. We're very disciplined in our approach now. The company, I think, has been demonstrating that we're gonna allocate capital prudently. We manage our debt levels to around two times leverage.
At some times, at last quarter, it was at two point seven times. By the end of this year, we would expect to be at two times or below. We feel good about our ability to do that over the longer term and have a demonstrated capability of doing so. It's a very capital-light business model. Right now, we're investing about 2.5% of sales. About $5 million of that is going to be related to growth CapEx that John mentioned, investments in our precast business. So, you know, our maintenance capital is more like $6-$8 million per year. So relatively light, and we feel good about that, improving our free cash flow. We do have a stock buyback program.
It's got $11 million remaining on the program at the moment, and we're still in the market buying shares today. So that's something that will continue through February of 2025, and then be revisited, I'm sure, by our board in terms of a new authorization. And then we also continue to look at smaller tuck-in acquisitions. We don't believe we need anything of substance to get to the goals that we've established for 2025, but we're always continuously looking for small tuck-in acquisitions that will extend our product portfolio or our regional reach. And we don't pay a dividend today, but that's certainly something that we would consider in the future with the prospects for free cash flow improving. So with that, I'll turn it over to John for his closing remarks.
Thanks, Bill. So, I just wanna leave with you the key messages we started with, but more importantly, talk about 2025 and where we aspire to go. So these goals were aspirational goals that we put up here in 2021. It was to get the attention of the investment community, but really more importantly, get the attention of our company, our people, our employees, and saying, it's time for us to work ourselves out of a tough situation. We had a lot of wind in our sails in the prior to, you know, 2015, then, you know, the perfect storm hit, and a lot of that was self-inflicted. So it was about being humble and restoring value to our shareholders.
And so we put these goals out there, and Bill and I are not coming off of that. This is where we aspire, but also what we're gonna be talking about going into next year, and we'll shore up that in March of next year. The company has seen numbers like this in the past, as back in 2012 and 2013. So to us, it's really just a journey to back to where we once were. But you know, we're not gonna be just staying here. It's not a destination, it is a journey. So we're gonna be continuing to really focus in our playbook, focus on where we can add value, taking advantage of this infrastructure super cycle right now for years to come.
I think it's, you know, a good bet is on L.B. Foster right now. Our people, our process, our focus, that, you know, unfortunately, we went through a tough patch, but that patch has made us better today than we were in the past. The gross profits, we're not far away from those numbers already right now. We've done a good job of getting price, and we came through COVID, and we said: We need to get after it, we need to get paid for the market, what the market will bear, not what we feel is reasonable with cost. And we made that happen, and then some. So that's part of our focus and what we're doing today, which is much, much different than what we've done in the past.
So I guess, in closing, we'd just like to thank everybody again today for your time. The meetings were fantastic. They hang with us late in the day as well, and we really thank you for looking at our company and give us the opportunity. We will not let you down. Thanks. Any questions for Bill or I?
Yes, sir. You talked about the free cash flow being very effective. Do you see that free cash flow as being sustainable?
Yeah-
Go ahead.
Yeah. Yeah, definitely. If you were to look at the company over a longer time frame, those free cash flows were consistently delivered at that level. Yeah, the sustainability, I would say, relates largely to the fact that it's a capital-light business model. We don't have cycles where we have to put significant CapEx into the business. There can be quarters where the working capital needs might be a little bit higher, but they tend to work out over a fairly short period of time. So yeah, I would say very sustainable at that level. Yes?
Have you ever come across a company called Duos Technologies ?
We're, actually, we were introduced, somebody mentioned them today to us, so interesting enough. So we have not in the past, but just something we're gonna take a look into. So thank you.
I thought you might know.
Yeah. All right, fair enough. Any other questions? Yeah, Harvey.
Could you talk about the... You talked about growth CapEx with maintenance, and it looks like by your numbers, right, it's $10 million of the CapEx, growth CapEx. So is the maintenance, if free cash flow is defined only with the maintenance CapEx, would it be $10 million?
No. Yeah, it's just breaking down the CapEx and what's embedded in the free cash flow number. So, our CapEx guidance for the year is about, take a midpoint, $13 million. I would say $5 million to $6 million of that is growth CapEx, with the balance being maintenance. And so, and in the cash flow number that we've projected for this year, that includes all CapEx, including growth CapEx. So you can add $4 million to $5 million on top of this year's number to get to a sustainable free cash flow number in the future. Yeah?
I remember some of your divisions, but I don't remember the total EBITDA margin. Can you talk a little bit more about that? It sounds like it's a pretty good division.
Yeah, it is. It's a great business. So here's a picture right here. So this is up in Canada on the CP line. And what you have is LiDAR technology that we've designed, developed. Obviously, that technology is available on the market, but it's about what it sees. So if you look at this, this is pretty tough terrain up there. And there's rockslides that happen all the time with the weather environment there. And what the railroads use today is a thing called slide fence. Literally a wire, trip wire, that's along the right of way of the rail. So if a debris comes through, they hope it hits that, or if an animal passes, they hope it hits that, and all it does is set off a you know, open circuit or alarm.
They have no idea what's there other than something tripped the wire. So what they do in a remote area like this is they send out a crew, and it could take them six hours to get out to this installation to figure out what happened, if anything. Or they do a Slow Order and slow down the trains. What our system does is give them visibility to exactly what happened. Is something going on the track? Is something on the track? Is it something that needs sent on a crew or not? So that's part of the Total Track Monitoring. So this is rockfall protection. That's something that we brought in from the... Again, I talked about U.K. So this, this technology came out of U.K. with kind of crossing protection related to the, you know, passenger protection related to crossings.
So we've taken that and bringing it to, you know, our customers here, both transit as well as, freight customers, of something that gives them early warning, early detection, and makes them a heck of a lot more efficient, versus sending crews out in the middle of the night and not sure what they're gonna find. That's one example. Second example is a product we make in Columbus, Ohio, and it's called WILD, Wheel Impact Load Detector. And we just introduced the fourth, generation of this product, and it's been around, this technology has been around for 30 years.
What this does, it gives the, again, transit authorities or the freight operators, early indication of what's going on between the relationship of that car, the track car and the train, or the track system itself. So if the car is hunting, which is going side to side, it'll tell 'em. If there's a wheel out of balance, it'll tell 'em. If there's weight out of balance, there's too much weight in the gondola in one part of the car or another, it'll tell 'em. It not only tells them the train, it'll tell 'em the car and tell 'em the axle and location. It'll take pictures of it. It'll tell 'em all the information, what's going on.
You see, this is the stuff that causes catastrophes later: these out-of-balance sides, hunting sides, where they were having these out of specification. Our company has made this technology for many, many years, and it's only recently, with the Safety Act, you know, Congress and the other issues that have happened, that this is becoming something that's very important, that our customers are now looking at more adoption of these type of units. Many of them, all of them use it, it's just they're spread out in long distances. So what's happening today is those distances are shrinking, so they have early detection across their tracks. So this is where that 300% over the last couple of years is coming from. We're looking for much, much more coming.
And we're the only accredited supplier in North America to do this. It's a very integrated technology, and it's something we've been doing for quite a period of time. So thank you.
What's the business model there in terms of the market size or pricing or?
We're defining. I think Michael would talk a little bit about that today and stuff. You know, I don't necessarily get into pricing, but I mean, a site like that, not this site, but the WILD site is about $500,000, cost to them from us. They got at least another $500,000 preparing the site. They harden it, and they really get it ready for the infrastructure. They got to put, you know, their own communications, bring power to the site, those type of things. You know, from that point of view, it's probably $1 million all in. As far as, you know, where it goes from here with the business model stuff and how big is this market, you know, I'm not sure. All I know is activity is strong.
We're seeing inquiries not just here in North America, we're seeing inquiries throughout the world for this product right now. So we're kind of defining this market right now, and we're very excited about it.
Yes, sir. And what year? 20 years-30 years .
Well, we aspire to be a, you know, it's not a magic number, but, you know, my boss and the chairman of the board would like to see us, you know, a billion-dollar plus company, not in the, you know, hundreds of millions. So, we definitely are looking to be, you know, a small micro-cap company, and the money's that we're spending to be publicly traded today, I think it really, it really just. We really need to be focused on being something larger than we are today. And I believe, and I know, these growth platforms we have today can get us there and continue to grow. Any other questions? Yes, sir. Yeah. Yeah. So that technology has been around for 30 years.
Yeah. It's really nifty. When we bought a company called Portec back in 2010, we didn't even know what the heck it was. We called it black magic. You know, we bought the company for an entire different reason. You know, lo and behold, we had no idea of the value of it, and more importantly, I think the customers are also coming along. Now, I mean, they're so excited. They could actually do something for almost no cost and make immediate returns to the railroad. Fuel efficiency, 3%-5% savings. I mean, how many things do you need to do in a short order to do that? Almost nothing, right? So, and, and, you know, the wear and tear on the rail, you know, some areas, if you don't have proper treatment, you're replacing the rail every year.
When you get in a curvature, and you get into a super grade, every year. You put these solutions in, they go ten years. And it, it's a defect you can't see in the rail. You know, you get these cracks, and then all of a sudden, they perpetuate into a broken rail, and broken rail is a really bad thing. So, this friction management thing is really something. Our customers, our industry, are slow at adopting, technology. Let's just say that. But when they get there, they go all in, and we're starting to see that now with friction management.
I guess the one data point I'd give you is 5% of the North American network is treated with friction management today, so opportunity for something much bigger than what it is today.
It's clear, yeah. So the market is about $150 million today. So again, back to Michael's question, we are defining this market too. We're sizing this market. Okay, any other questions, comments? Well, thank you for your time. We appreciate it. Thank you.