UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported)
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February 28, 2011
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L. B. Foster Company
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(Exact name of registrant as specified in its charter)
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Pennsylvania
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000-10436
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25-1324733
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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415 Holiday Drive, Pittsburgh, Pennsylvania
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15220
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code
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(412) 928-3417
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(Former name or former address, if changed since last report.)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Explanatory Note
This filing is being made pursuant to the requirements of Item 2.01 for Form 8-K with respect to filing the required financial statements and pro forma information regarding the Form 8-K filing made on December 21, 2010 by L.B. Foster Company and Subsidiaries (Foster) announcing the acquisition of Portec Rail Products, Inc. (Portec) on December 15, 2010.
Item 2.01 Completion of Acquisition or Disposition of Assets
On December 22, 2010, Foster was notified that, as of the expiration of the offering period, approximately 8,662,078 shares were validly tendered and not properly withdrawn pursuant to the offer, which represented approximately 90.20% of all outstanding shares of Portec. Foster has accepted for payment all shares that were validly tendered and not properly withdrawn, and payment for such shares has been made in accordance with the offer's terms. Foster effected the merger as a "short form" merger in accordance with the terms of the merger agreement and West Virginia law.
On December 27, 2010, Portec became a wholly-owned subsidiary of Foster pursuant to the terms of the merger agreement. The merger was consummated pursuant to Section 31D-11-1105 of the West Virginia Business Corporation Act without a vote or meeting of Portec’s stockholders. In the merger, all outstanding shares of common stock of Portec were canceled and converted into the right to receive consideration equal to $11.80 per share, net to the holder in cash, without interest thereon. The total consideration paid by Foster for the shares was approximately $113,322,000.
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired.
We incorporate here by reference:
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·
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Portec’s audited consolidated financial statements for the year ended December 31, 2009, notes thereto, financial statement schedule and the Report of Independent Registered Public Accounting Firm included in the Company’s Annual Report on Form 10-K filed with the Commission on March 15, 2010, as subsequently amended on April 28, 2010.
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(b) Unaudited Pro Forma Financial Information.
Included as exhibit herein is unaudited pro forma combined financial information including unaudited pro forma combined balance sheet as of September 30, 2010 and unaudited pro forma combined statements of operations for the year ended December 31, 2009 and the nine month period ended September 30, 2010.
(d) Exhibits.
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23.1
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Consent of Independent Registered Public Accounting Firm
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23.2
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Consent of Independent Registered Public Accounting Firm
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99.1
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Unaudited pro forma combined financial information.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
L.B. Foster Company
(Registrant)
Date: February 28, 2011
/s/ David J. Russo
David J. Russo
Senior Vice President,
Chief Financial and Accounting Officer and Treasurer
EXHIBIT INDEX
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Exhibit Number
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Description
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23.1
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Consent of Independent Registered Public Accounting Firm.
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23.2
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Consent of Independent Registered Public Accounting Firm
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99.1
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Unaudited pro forma combined financial information.
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements (No. 33-17073, 33-35152, 33-79450, 333-65885, 333-81535, 333-60488, 333-135002, and 333-159470) on Forms S-8 of L.B. Foster Company and Subsidiaries of our reports dated March 15, 2010, relating to our audits of the consolidated financial statements and the effectiveness of internal control over financial reporting of Portec Rail Products, Inc., and Subsidiaries which appears in the Annual Report on Form 10-K of Portec Rail Products, Inc., for the year ended December 31, 2009, filed with the Commission on March 15, 2010, as subsequently amended on April 28, 2010, which is incorporated by reference in this Current Report on Form 8-K.
/s/ ARNETT & FOSTER, P.L.L.C.
ARNETT & FOSTER, P.L.L.C.
Charleston, West Virginia
February 28, 2011
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in L. B. Foster Company and Subsidiaries Registration Statements (Forms S-8 No. 33-17073, 33-35152, 33-79450, 333-65885, 333-81535, 333-60488, 333-135002, and 333-159470) of our reports dated March 15, 2010, with respect to the consolidated financial statements of Portec Rail Products, Inc. as of December 31, 2009 appearing in this Form 8-K/A of L.B. Foster Company and Subsidiaries.
/s/ Garbutt & Elliott LLP
Garbutt & Elliott LLP
York United Kingdom
February 28, 2010
Exhibit 99.1
L.B. FOSTER COMPANY
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following unaudited pro forma combined financial information is based on the historical consolidated financial statements of L.B. Foster Company and Subsidiaries (Foster) and Portec Rail Products, Inc. (Portec), adjusted to reflect the acquisition of Portec by Foster. The unaudited pro forma combined balance sheet gives effect to the acquisition of Portec by Foster as if it had occurred on September 30, 2010. The unaudited pro forma combined statement of operations combine the results of operations of Foster and Portec for the year ended December 31, 2009 and for the nine month period ended September 30, 2010. The unaudited pro forma combined statement of operations give effect to the following events as if they had occurred on January 1, 2009:
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Foster’s acquisition of Portec. The acquisition will be accounted for using the acquisition method of accounting. Certain assets, revenues and expenses have been excluded from the acquisition and are reflected in the “carve-out” adjustments shown to reflect the disposition of the Huntington, WV rail joint business.
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An adjustment to record the repayment of Portec debt from the proceeds received from the sale of assets not included in the acquisition.
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Adjustments to record the preliminary estimates of the fair value of assets and liabilities acquired over their historical basis.
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An adjustment to record an estimated deferred tax liability related to the fair value of assets acquired.
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The unaudited pro forma combined financial information should be read in conjunction with the Form 10-K’s of Foster and Portec for the year ended December 31, 2009 and their Form 10-Q’s for the quarterly period ended September 30, 2010.
The unaudited pro forma combined financial statements do not reflect the realization of any potential cost savings or any related integration costs. Although the Company believes that certain cost-savings may result from the acquisition, there can be no assurance that these cost savings will be achieved.
The unaudited pro forma combined financial information is for informational purposes only and is not intended to represent or to be indicative of the combined results of operations or financial position that Foster or the pro forma combined company would have reported had the acquisition been completed as of the dates set forth in this unaudited pro forma combined financial information and should not be taken as indicative of Foster's future combined results of operations or financial position. The actual results may differ significantly from that reflected in the unaudited pro forma combined financial information for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the unaudited pro forma combined financial information and actual results.
Estimates of fair value assigned on the unaudited pro forma combined financial statements presented are preliminary, and may change.
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L. B. FOSTER COMPANY AND SUBSIDIARIES
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PRO FORMA COMBINED STATEMENTS OF OPERATIONS
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FOR THE YEAR ENDED DECEMBER 31, 2009
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UNAUDITED (In Thousands, except per share amounts)
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Historical
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Adjustments
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Pro – Forma
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Foster
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Portec
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Carve-Out (a)
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Pro Forma (b)
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Combined
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NET SALES
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$ | 404,020 | $ | 92,221 | $ | (17,961 | ) | $ | - | $ | 478,280 | |||||||||
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COSTS AND EXPENSES:
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Cost of goods sold
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344,162 | 60,871 | (15,771 | ) | 3,887 | 393,149 | ||||||||||||||
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Selling and administrative expenses
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35,501 | 22,742 | (1,131 | ) | 1,906 | 59,018 | ||||||||||||||
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Interest expense
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1,292 | 298 | - | - | 1,590 | |||||||||||||||
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Dividend income
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(93 | ) | - | - | - | (93 | ) | |||||||||||||
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Gain on sale of marketable securities
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(1,194 | ) | - | - | - | (1,194 | ) | |||||||||||||
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Interest income
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(789 | ) | - | - | - | (789 | ) | |||||||||||||
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Other income
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(342 | ) | (191 | ) | - | - | (533 | ) | ||||||||||||
| 378,537 | 83,720 | (16,902 | ) | 5,793 | 451,148 | |||||||||||||||
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INCOME BEFORE INCOME TAXES
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25,483 | 8,501 | (1,059 | ) | (5,793 | ) | 27,132 | |||||||||||||
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INCOME TAX EXPENSE
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9,756 | 1,696 | (360 | ) | (1,738 | ) | 9,354 | |||||||||||||
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NET INCOME
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$ | 15,727 | $ | 6,805 | $ | (699 | ) | $ | (4,055 | ) | $ | 17,778 | ||||||||
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BASIC EARNINGS PER COMMON SHARE
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$ | 1.55 | $ | 1.75 | ||||||||||||||||
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DILUTED EARNINGS PER COMMON SHARE
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$ | 1.53 | $ | 1.73 | ||||||||||||||||
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Weighted Average Number of Common Shares Outstanding:
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Basic
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10,169 | 10,169 | ||||||||||||||||||
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Diluted
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10,304 | 10,304 | ||||||||||||||||||
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L. B. FOSTER COMPANY AND SUBSIDIARIES
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PRO FORMA COMBINED STATEMENTS OF OPERATIONS
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FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2010
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UNAUDITED (In Thousands, except per share amounts)
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Historical
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Adjustments
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Pro – Forma
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Foster
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Portec
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Carve-Out (a)
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Pro Forma (b)
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Combined
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NET SALES
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$ | 327,067 | $ | 83,663 | $ | (18,232 | ) | $ | - | $ | 392,498 | |||||||||
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COSTS AND EXPENSES:
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Cost of goods sold
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274,637 | 55,915 | (15,279 | ) | 472 | 315,745 | ||||||||||||||
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Selling and administrative expenses
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29,825 | 22,494 | (861 | ) | 1,481 | 52,939 | ||||||||||||||
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Interest expense
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697 | 185 | - | - | 882 | |||||||||||||||
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Equity in losses of nonconsolidated investments
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272 | - | - | - | 272 | |||||||||||||||
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Interest income
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(295 | ) | - | - | - | (295 | ) | |||||||||||||
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Other (income) expense
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(199 | ) | 414 | - | - | 215 | ||||||||||||||
| 304,937 | 79,008 | (16,140 | ) | 1,953 | 369,758 | |||||||||||||||
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INCOME BEFORE INCOME TAXES
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22,130 | 4,655 | (2,092 | ) | (1,953 | ) | 22,740 | |||||||||||||
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INCOME TAX EXPENSE
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7,877 | 2,093 | (711 | ) | (586 | ) | 8,673 | |||||||||||||
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NET INCOME
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$ | 14,253 | $ | 2,562 | $ | (1,381 | ) | $ | (1,367 | ) | $ | 14,067 | ||||||||
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BASIC EARNINGS PER COMMON SHARE
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$ | 1.40 | $ | 1.38 | ||||||||||||||||
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DILUTED EARNINGS PER COMMON SHARE
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$ | 1.38 | $ | 1.36 | ||||||||||||||||
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Weighted Average Number of Common Shares Outstanding:
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Basic
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10,203 | 10,203 | ||||||||||||||||||
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Diluted
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10,324 | 10,324 | ||||||||||||||||||
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L. B. FOSTER COMPANY AND SUBSIDIARIES
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PRO FORMA COMBINED BALANCE SHEETS
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SEPTEMBER 30, 2010
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UNAUDITED (In Thousands)
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Historical
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Adjustments
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Pro - Forma
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Foster
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Portec
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Carve-Out (a)
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Pro Forma
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Combined
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ASSETS
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Current Assets:
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Cash and cash equivalents
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$ | 144,183 | $ | 16,946 | $ | - | $ | (113,322 | ) |
(c)
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$ | 49,309 | |||||||||
| 10,179 |
(a)
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| $ | (8,677 | ) |
(d)
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Account receivable - net
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62,387 | 15,999 | - | - | 78,386 | ||||||||||||||||
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Inventories - net
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94,688 | 20,934 | (6,070 | ) | 3,257 |
(e)
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112,809 | ||||||||||||||
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Current deferred tax assets
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3,671 | 85 | - | - | 3,756 | ||||||||||||||||
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Assets held for sale
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- | - | 8,673 | 1,506 |
(e)(f)
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- | |||||||||||||||
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(a)
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Other current assets
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1,931 | 1,965 | (16 | ) | - | 3,880 | |||||||||||||||
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Total Current Assets
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306,860 | 55,929 | 2,587 | (117,236 | ) | 248,140 | |||||||||||||||
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Property, Plant & Equipment - net
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35,453 | 9,558 | (2,480 | ) | 3,763 |
(f)
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46,294 | ||||||||||||||
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Other Assets:
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Goodwill
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3,211 | 14,486 | - | - | 42,322 | ||||||||||||||||
| 113,322 |
(c)
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| (1,506 | ) |
(e)(f)
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| (3,763 | ) |
(f)
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| (3,257 | ) |
(e)
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| (22,364 | ) |
(g)
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| (67,256 | ) |
(h)
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| 906 |
(i)
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| 8,543 |
(j)
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Other intangibles - net
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1,663 | 27,933 | (107 | ) | 22,364 |
(g)
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51,853 | ||||||||||||||
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Investments
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4,053 | - | - | - | 4,053 | ||||||||||||||||
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Deferred tax assets
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1,573 | - | - | - | 1,573 | ||||||||||||||||
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Other assets
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1,320 | 591 | - | - | 1,911 | ||||||||||||||||
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Total Other Assets
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11,820 | 43,010 | (107 | ) | 46,989 | 101,712 | |||||||||||||||
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TOTAL ASSETS
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$ | 354,133 | $ | 108,497 | $ | - | $ | (66,484 | ) | $ | 396,146 | ||||||||||
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L. B. FOSTER COMPANY AND SUBSIDIARIES
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PRO FORMA COMBINED BALANCE SHEETS
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SEPTEMBER 30, 2010
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UNAUDITED (In Thousands)
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Historical
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Adjustments
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Pro - Forma
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Foster
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Portec
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Carve-Out(a)
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Pro Forma
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Combined
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current Liabilities:
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Current maturities on other long-term debt
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$ | 2,745 | $ | - | $ | - | $ | - | $ | 2,745 | |||||||||||
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Current maturities on long-term debt, term loan
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10,952 | 7,707 | - | (7,707 | ) |
(d)
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10,952 | ||||||||||||||
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Accounts payable - trade
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43,549 | 8,972 | - | - | 52,521 | ||||||||||||||||
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Deferred revenue
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25,309 | 938 | - | - | 26,247 | ||||||||||||||||
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Accrued payroll and employee benefits
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6,283 | 2,994 | - | - | 9,277 | ||||||||||||||||
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Other accrued liabilities
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6,025 | 4,468 | - | - | 10,493 | ||||||||||||||||
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Total Current Liabilities
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94,863 | 25,079 | - | (7,707 | ) | 112,235 | |||||||||||||||
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Long-Term Debt, Term Loan
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- | 970 | - | (970 | ) |
(d)
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- | ||||||||||||||
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Other Long-Term Debt
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2,702 | - | - | - | 2,702 | ||||||||||||||||
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Deferred Tax Liabilities
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1,956 | 10,415 | - | 8,543 |
(j)
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20,914 | |||||||||||||||
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Other Long-Term Liabilities
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5,559 | 4,777 | - | 906 |
(i)
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11,242 | |||||||||||||||
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STOCKHOLDERS' EQUITY:
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Total Stockholders' Equity
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249,053 | 67,256 | - | (67,256 | ) |
(h)
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249,053 | ||||||||||||||
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$ | 354,133 | $ | 108,497 | $ | - | $ | (66,484 | ) | $ | 396,146 | ||||||||||
Pro forma Footnotes
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(a)
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The carve-out adjustments consist of the assets, revenues and expenses, and the related cash proceeds received, associated with the divestiture of Portec’s rail joint business located in Huntington, WV.
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(b)
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Adjustment to record an estimated increase in (i) depreciation expense related to the estimated fair value of property, plant and equipment; (ii) amortization expense related to the estimated fair value of finite lived intangible assets, and (iii) cost of good sold for the estimated write-up of inventory to fair value less costs to sell, and (iv) income taxes at an estimated statutory rate.
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(c)
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To record the acquisition of Portec.
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(d)
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To record the pay-off of Portec’s debt from the proceeds received from the divestiture of Portec’s rail joint business.
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(e)
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To record the preliminary estimates of the fair value of inventory less costs to sell.
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(f)
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To record the preliminary estimates of the fair value of property, plant and equipment.
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(g)
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To record the preliminary estimates of the fair value of identified intangible assets.
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(h)
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To eliminate the historical equity of Portec.
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(i)
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To record an adjustment to Portec’s pension liabilities to fair value as of the acquisition date.
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(j)
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To record an estimated deferred income tax liability related to the fair value adjustments of inventory, property, plant and equipment, identified intangible assets and pension liabilities.
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