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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.
For the fiscal year ended December 31, 2008.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the transition period from ___________to_____________
Commission file number 0-10436.
L. B. Foster Company 401(k) and Profit Sharing Plan
- --------------------------------------------------------------------------------
(Full title of the plan and the address of plan, if different
from that of the issuer named below)
L. B. FOSTER COMPANY
415 Holiday Drive
Pittsburgh, PA 15222
- --------------------------------------------------------------------------------
(Name of issuer of the securities held pursuant to
the plan and the address of its principal executive office)
FINANCIAL STATEMENTS AND OTHER
FINANCIAL INFORMATION
L.B. Foster Company 401(k) and Profit Sharing Plan
December 31, 2008 and 2007, and the Year Ended
December 31, 2008
With Report of Independent Registered Public Accounting
Firm
L. B. Foster Company
401(k) and Profit Sharing Plan
Financial Statements
and Other Financial Information
December 31, 2008 and 2007,
and the Year Ended December 31, 2008
Contents
Report of Independent Registered Public Accounting Firm........................1
Financial Statements
Statements of Net Assets Available for Benefits................................2
Statement of Changes in Net Assets Available for Benefits......................3
Notes to Financial Statements..................................................4
Other Financial Information
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)................12
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Plan Administrator
L. B. Foster Company
401(k) and Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits
of the L. B. Foster Company 401(k) and Profit Sharing Plan as of December 31,
2008 and 2007, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2008. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform an
audit of the Plan's internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Plan's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2008 and 2007, and the changes in its net assets available for
benefits for the year ended December 31, 2008, in conformity with U.S. generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2008 is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
Pittsburgh, Pennsylvania
June 25, 2009
L. B. Foster Company
401(k) and Profit Sharing Plan
Statements of Net Assets Available for Benefits
December 31
2008 2007
----------- -----------
Assets
Investments, at fair value $34,699,901 $47,945,591
Participant loans 824,223 685,149
----------- -----------
35,524,124 48,630,740
Receivables:
Employer 1,000,000 1,000,000
Other - 15,671
----------- -----------
1,000,000 1,015,671
----------- -----------
Net assets available for benefits, at fair value 36,524,124 49,646,411
Adjustment from fair value to contract value for
investments in fully benefit-responsive
investment contracts - 13,768
----------- -----------
Net assets available for benefits $36,524,124 $49,660,179
=========== ===========
See accompanying notes.
L. B. Foster Company
401(k) and Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2008
Investment income (loss):
Interest and dividends $ 1,482,720
Net realized/unrealized depreciation in investment fair value (16,791,300)
------------
Total investment loss (15,308,580)
Contributions:
Employee 2,244,903
Employer 1,847,482
Rollover 58,353
------------
Total contributions 4,150,738
------------
(11,157,842)
Deductions from net assets available attributable to:
Benefit payments 1,970,721
Administrative expenses 7,492
------------
1,978,213
------------
Decrease in net assets available for benefits (13,136,055)
Net assets available for benefits, beginning of year 49,660,179
------------
Net assets available for benefits, end of year $36,524,124
============
See accompanying notes.
L. B. Foster Company
401(k) and Profit Sharing Plan
Notes to Financial Statements
December 31, 2008 and 2007
1. Description of Plan
Effective March 1, 2007, the Company merged the L. B. Foster Company Retirement
Savings Plan into the L. B. Foster Company Voluntary Investment Plan. The
consolidated plan became the L. B. Foster Company 401(k) and Profit Sharing
Plan. The following brief description of the L. B. Foster Company 401(k) and
Profit Sharing Plan (the Plan) is provided for general information purposes.
Participants should refer to the summary plan description for more complete
information.
General
The Plan is a defined contribution plan extended to all eligible employees of L.
B. Foster Company (the Company) who have attained age 18. The L. B. Foster
Company Employee Benefits Policy and Review Committee, appointed by the Board of
Directors of the Company, collectively serves as the plan administrator. The
Plan is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA) as amended.
Contributions
Contributions under the Plan are made by both the participants and the Company.
A participant who elects to make pretax contributions of at least the maximum
amount subject to Company matching can also elect to make additional voluntary
contributions on an after-tax basis. Participants may contribute up to 75% of
their annual pretax compensation and up to 100% of their compensation on an
after-tax basis, subject to Internal Revenue Code limitations. There is no limit
on aggregate pretax and after-tax contributions. Participant contributions and
employer matching contributions are invested in accordance with participant
elections. In the event that a participant does not make an investment election,
contributions are invested in the Fidelity Freedom funds until such time as an
election is made by the participant. The participant may transfer contributions
defaulted to these funds into other investment options at the participant's
discretion.
The Plan includes a provision for an immediate Company match. Participants
receive a Company match of 100% of the first 1% of their eligible compensation
and 50% of the next 6% of their eligible compensation for a maximum Company
match of 4%. To be eligible for the Company matching contributions, participants
must make pretax deferral contributions or Roth 401(k) after tax deferral
contributions. The Plan will match on the combined total of these contributions
up to the matching limit.
1. Description of Plan (continued)
The Company, upon resolution of the Board of Directors, may make a discretionary
profit sharing contribution of an amount out of, but not in excess of, the
Company's current or accumulated profits. Participants must have attained one
year of service as of the last day of the Plan year in order to be eligible for
the discretionary profit sharing contribution, if any, for that year.
Discretionary profit sharing contributions are directed into eligible
participant accounts based on the participants' investment elections at the time
the contribution is made. Discretionary profit sharing contributions of
$1,000,000 were approved for 2008 and 2007. Forfeitures of discretionary
contributions are reallocated to the Plan's remaining, eligible participants.
The Company's matching contributions may be reduced by any forfeitures that
accumulate from terminations of participants with nonvested employer matching
contributions. During the year ended December 31, 2008, the Company utilized
forfeitures approximating $185,600 to offset Company contributions. At December
31, 2008 and 2007, forfeitures approximating $25,260 and $34,900, respectively,
were available to reduce future company contributions.
Vesting
A participant's vested interest in the Plan on any date is equal to the sum of
the values of (a) that portion of the participant's account attributable to the
participant's contributions and (b) that portion of the participant's account
attributable to the Company's contributions multiplied by the applicable vesting
percentage plus or minus related earnings (losses). Participants are 100% vested
in the Company's contributions after two years of eligible service.
Notwithstanding the above, a participant who terminates from the Plan by reason
of retirement, disability, or death is fully vested in their participant
account.
Distributions
Normal retirement age is 65. Early retirement age is 55, provided that the
participant has at least five years of service. In addition, a participant may
obtain an early retirement distribution prior to reaching age 55, provided that
the participant will turn 55 in the year the distribution occurs and that the
participant has at least five years of service.
As provided by the Plan, the distribution to which a participant is entitled by
reason of normal, early, late, or disability retirement, death, or termination
of employment may be made in the form of direct rollover, annuity, cash, or
partly in cash and partly as an annuity. The amount of such distribution is
equal to the participant's vested account balance on the valuation date.
1. Description of Plan (continued)
Withdrawals
Under the Plan, a participant may elect to withdraw voluntary, after-tax
contributions made to the Plan prior to January 1, 1987. Such withdrawals are
subject to a $1,000 minimum. In the event of extreme hardship and subject to
certain restrictions and limitations, a participant may withdraw their vested
interest in the portion of their account, subject to a $500 minimum,
attributable to matching, fixed, and discretionary contributions, and related
earnings. The Plan also allows for age 59 1/2 in-service withdrawals of all or
any portion of the participant's vested account balance.
Participants' Accounts
Each participant's account is credited with the participant's pretax and
voluntary contributions, the participant's allocable share of Company
contributions, and related earnings of the funds. Participants' accounts may be
invested in 10% increments into any of the mutual funds available under the Plan
at the direction of the participant.
Loans
A participant may obtain a loan equal to the lesser of 50% of their vested
account balance or $50,000. The loan proceeds are deducted from the
participant's account and are repaid by means of payroll deductions. Loans are
required to be repaid within 60 months from the date on which the loan is
originally granted and may be prepaid early without penalty. The repayment
period for a loan that is obtained for purchasing a primary residence may be as
long as 360 months. The loan carries a reasonable interest rate as determined by
the Plan Sponsor. The interest rate is computed on the date the loan is
requested and remains fixed for the full term of the loan.
Plan Termination
Although it has not expressed any intention to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. Should the Plan be terminated,
participants will become fully vested in their accounts, and the assets of the
Plan would be distributed to the participants based on their individual account
balances as determined under the plan provisions.
2. Summary of Significant Accounting Policies
Valuation of Investments
Mutual fund values are based on the underlying investments in securities. Mutual
fund securities traded on security exchanges are valued at the latest quoted
sales price. Securities traded on a national securities exchange are valued at
the last reported sales price on the last business day of the plan year. The
contract value of participation units owned in the collective trust fund is
based on quoted redemption values, as determined by the Trustee, on the last
business day of the plan year. The fair value of participation units owned by
the collective trust fund is determined based on the present value of the
underlying contracts' cash flows, discounted at current market rates for
investments of similar quality and duration. Loans receivable from participants
are valued at cost which approximates fair value.
Realized gain or loss includes recognized gains and losses on the sale of
investments. Unrealized appreciation or depreciation represents changes in value
from original cost. Dividend income is recorded on the ex-dividend date and
interest income is accrued as earned.
As described above, the assets of the Plan are concentrated in mutual funds
consisting primarily of stocks and bonds. Realization of amounts disclosed as
net assets available for benefits is dependent on the results of these markets.
In September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157),
which establishes a framework for measuring fair value in accordance with U.S.
generally accepted accounting principles and expands disclosures about fair
value measurements. On January 1, 2008, the Plan adopted SFAS 157. Adoption did
not impact the net assets available for benefits but resulted in additional
disclosures (Note 7).
Basis of Accounting
The financial statements of the Plan are maintained on the accrual basis.
Contributions receivable are recorded among the available investment options
based upon the participants' aggregate investment allocations in effect at the
end of the plan year.
2. Summary of Significant Accounting Policies (continued)
Use of Estimates
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates that affect
the amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Expenses
The Company, as provided by the Plan, pays expenses of the Plan. Expenses
incurred to establish and maintain a loan are charged to the applicable
participant.
3. Investments
The fair value of investments representing 5% or more of the Plan's assets at
December 31, 2008 and 2007 is as follows:
2008 2007
------------ ------------
Fidelity Investments:
International Discovery Fund $ 2,368,277 $ 4,295,036
Retirement Government Money Market Fund 5,248,912 3,464,479
Spartan US Equity Index Fund 2,087,370 3,365,131
Mutual Shares Class A 2,178,339 3,859,108
Davis NY Venture Fund 2,363,059 4,302,694
PIMCO Total Return Fund 2,315,093 1,672,612
L. B. Foster Company Stock Fund 5,138,570 8,175,923
3. Investments (continued)
For the year ended December 31, 2008, the Plan's investments (including
investments bought, sold, and held during the year) appreciated (depreciated) in
value as follows:
Net Realized/
Unrealized
Fair Market Appreciation
Value (Depreciation)
------------ -------------
Fidelity Investments:
Equity Income Fund $ 1,258,459 $ (986,502)
Government Income Fund 1,675,465 79,792
Balanced Fund 851,527 (437,181)
Low Price Stock Fund 981,493 (792,567)
Small Cap Stock Fund 625,568 (479,843)
Value Fund 74,118 (60,961)
International Discovery Fund 2,368,277 (2,018,201)
Cap Appreciation Fund 157,374 (106,313)
Spartan Extended Market Index Fund 279,472 (83,207)
Spartan International Index Fund 322,321 (255,844)
Spartan US Equity Index Fund 2,087,370 (1,278,616)
Freedom Income Fund 102,869 (34,040)
Freedom 2000 2,669 (684)
Freedom 2010 931,713 (342,737)
Freedom 2020 1,500,131 (820,532)
Freedom 2030 1,220,041 (739,243)
Freedom 2040 388,424 (264,314)
Freedom 2005 44,204 (17,195)
Freedom 2015 334,170 (140,786)
Freedom 2025 409,514 (240,160)
Freedom 2035 20,161 (14,088)
Freedom 2045 123,229 (74,749)
Freedom 2050 91,975 (64,766)
Retirement Government Money Market Fund 5,248,912 -
Mutual Shares 2,178,339 (1,507,686)
Davis NY Venture Fund 2,363,059 (1,666,809)
Columbia Acorn Select Z Fund 711,219 (749,070)
PIMCO Total Return Fund 2,315,093 (123,006)
Allianz NFJ Small Cap Value Fund 894,165 (442,367)
L. B. Foster Company Stock Fund 5,138,570 (3,129,625)
------------ -------------
$ 34,699,901 $(16,791,300)
============ =============
4. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated July 30, 2002, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the Code) and, therefore, the related trust is exempt
from taxation. Subsequent to this determination by the Internal Revenue Service,
the Plan was amended. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The plan administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan, as amended, is
qualified and the related trust is tax exempt.
5. Transactions With Parties in Interest
Certain trustee, accounting, and administrative expenses relating to the
maintenance of participant records and the Plan's administration are absorbed by
the Company.
6. Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are
exposed to various risks such as interest rate, market, and credit risks. Due to
the level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect
participants' account balances and the amounts reported in the Statements of Net
Assets Available for Benefits.
7. Fair Value Measurements
Effective January 1, 2008, the Plan adopted the provisions of SFAS 157 for its
financial assets carried in the financial statements at fair value on a
recurring basis. SFAS 157 defines fair value as the exchange price that would be
received for an asset in an orderly transaction between market participants at
the measurement date. SFAS 157 also establishes a fair value hierarchy and
requires categorization of assets measured at fair value into one of three
levels based on the inputs used in the valuation. Assets are classified in their
entirety based on the lowest level of input significant to the fair value
measurement. The three levels are defined as:
Level 1 - Observable inputs based on quoted prices (unadjusted) in active
markets for identical assets.
7. Fair Value Measurements (continued)
Level 2 - Observable inputs, other than those included in Level 1, based on
quoted prices for similar assets in active markets or quoted prices for
identical assets in inactive markets.
Level 3 - Unobservable inputs that reflect an entity's own assumptions
about the inputs a market participant would use in pricing the asset based on
the best information available in the circumstances.
Investments included in the statements of net assets available for benefits in
mutual funds totaling $29,561,331 and in the Company's common stock of
$5,138,570 are stated at fair value as of December 31, 2008. These investments
are based upon daily unadjusted quoted prices and, therefore, are considered
Level 1.
Participant loans are valued at amortized cost, which approximates fair value,
and are considered Level 3, and a summary of changes in the fair value for the
year ended December 31, 2008 follows:
Balance, beginning of year $ 685,149
Issuances 400,716
Repayments and distributions (261,642)
------------
Balance, end of year $ 824,223
============
Other Financial Information
L. B. Foster Company
401(k) and Profit Sharing Plan
EIN #25-1324733 Plan #201
Schedule H, Line 4i - Schedule of Assets
(Held at End of Year)
December 31, 2008
Identity of Issue, Borrower, Shares Fair Market
Lessor, or Similar Party Description of Investment Held Value
- ---------------------------------------------------------------------------------------------------------------
Fidelity Investments*:
Equity Income Fund Equities 40,766 $ 1,258,459
Government Income Fund Government obligations 153,010 1,675,465
Balanced Fund Equities 64,903 851,527
Low Price Stock Fund Equities 42,452 981,493
Small Cap Stock Fund Equities 63,834 625,568
Value Fund Equities 1,859 74,118
International Discovery Fund Equities 100,223 2,368,277
Cap Appreciation Fund Equities 10,005 157,374
Spartan Extended Market Index Fund Index funds 12,393 279,472
Spartan International Index Fund Index funds 12,054 322,321
Spartan US Equity Index Equity funds, index funds 65,435 2,087,370
Freedom Income Fund Equity funds, fixed income funds 10,760 102,869
Freedom 2000 Equity funds, fixed income funds 266 2,669
Freedom 2010 Equity funds, fixed income funds 89,934 931,713
Freedom 2020 Equity funds, fixed income funds 149,267 1,500,131
Freedom 2030 Equity funds, fixed income funds 125,004 1,220,041
Freedom 2040 Equity funds, fixed income funds 69,485 388,424
Freedom 2005 Equity funds, fixed income funds 5,269 44,204
Freedom 2015 Equity funds, fixed income funds 39,039 334,170
Freedom 2025 Equity funds, fixed income funds 49,759 409,514
Freedom 2035 Equity funds, fixed income funds 2,511 20,161
Freedom 2045 Equity funds, fixed income funds 18,728 123,229
Freedom 2050 Equity funds, fixed income funds 14,238 91,975
Retirement Government Money Market Fund Government obligations, money
market securities 5,248,912 5,248,912
Mutal Shares Class A Equities 143,123 2,178,339
Davis NY Venture Fund Equities 100,045 2,363,059
Columbia Acorn Select Z Fund Equities 50,549 711,219
PIMCO Total Return Fund Fixed income securities 228,313 2,315,093
Allianz NFJ Small Cap Value Fund Equities 46,938 894,165
------------
Total mutual funds 29,561,331
L. B. Foster Company Stock Fund Common stock 164,223 5,138,570
------------
5,138,570
Outstanding participant loans* Participant loans, interest rates
ranging from 4.5% to 10.5%,
various maturities ranging
from 2 to 30 years 824,223
------------
$ 35,524,124
============
*Party in interest
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
L. B. Foster Company 401(k)
And Profit Sharing Plan
---------------------------
(Name of Plan)
Date: June 26, 2009 By: /s/ David L. Voltz
------------- ---------------------------
David L. Voltz
Vice President,
General Counsel and
Secretary
EXHIBIT INDEX
Exhibit 23.1 Consent of Independent Registered Public Accounting Firm
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-65885) pertaining to the L. B. Foster Company 401(k) and Profit
Sharing Plan of our report dated June 25, 2009, with respect to the financial
statements and schedule of the L. B. Foster Company 401(k) and Profit Sharing
Plan included in this Annual Report (Form 11-K) for the year ended December 31,
2008.
/s/ Ernst & Young LLP
Pittsburgh, Pennsylvania
June 25, 2009