UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30, 1997
Commission File Number 0-10436
L. B. Foster Company
(Exact name of registrant as specified in its charter)
Delaware 25-1324733
(State of Incorporation) (I.R.S. Employer Identification No.)
415 Holiday Drive, Pittsburgh, Pennsylvania 15220
(Address of principal executive offices) (Zip Code)
(412) 928-3417
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the
registrant's classes of common stock as of the latest
practicable date.
Class Outstanding at November 6, 1997
Class A Common Stock, Par Value $.01 10,060,738 Shares
L. B. FOSTER COMPANY AND SUBSIDIARIES
INDEX
PART I. Financial Information Page
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets 2
Condensed Consolidated Statements of Income 3
Condensed Consolidated Statements of Cash Flows 4
Notes to Condensed Consolidated
Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. Other Information
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 6. Exhibits and Reports on Form 8-K 15
Signature 17
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
L. B. FOSTER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
September 30, December 31,
1997 1996
ASSETS ----------------------------
Current Assets:
Cash and cash equivalents $ 1,056 $ 1,201
Accounts and notes receivable (Note 3):
Trade 41,977 49,468
Other 2,568 450
----------------------------
44,545 49,918
Inventories (Note 4) 48,367 42,925
Current deferred tax assets 1,214
Other current assets 407 398
---------------------------
Total current assets 94,375 95,656
---------------------------
Property, Plant & Equipment-At Cost 39,546 40,965
Less Accumulated Depreciation (20,784) (20,498)
---------------------------
18,762 20,467
Property Held for Resale 4,054 4,022
Goodwill and Intangibles 2,365 184
Investments 1,693 193
Other Assets 3,133 2,876
---------------------------
TOTAL ASSETS $124,382 $123,398
---------------------------
---------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $ 1,327 $ 1,366
Short-term borrowings (Note 5) 13,000 6,000
Accounts payable 13,149 19,060
Accrued payroll and employee
benefits payable 2,686 3,543
Other current liabilities 1,185 2,160
-------------------------
Total current liabilities 31,347 32,129
-------------------------
Long-Term Borrowings 18,000 18,000
Other Long-Term Debt 2,833 3,816
Deferred Tax Liabilities 563 394
Other Long-Term Liabilities 1,941 1,878
Stockholders' Equity:
Class A Common stock 102 102
Paid-in capital 35,425 35,276
Retained earnings 34,828 32,338
Treasury stock (657) (535)
-------------------------
Total stockholders' equity 69,698 67,181
-------------------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $124,382 $123,398
-------------------------
-------------------------
See Notes to Condensed Consolidated Financial Statements.
L. B. FOSTER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
Three Months Nine Months
Ended Ended
September 30, September 30,
----------------------------------------------
1997 1996 1997 1996
----------------------------------------------
Net Sales $ 56,935 $ 65,525 $165,145 $178,586
----------------------------------------------
Costs and Expenses:
Cost of Goods Sold 48,513 56,914 142,561 155,582
Selling and Admin-
istrative Expenses 5,946 5,957 17,073 16,970
Interest Expense 664 606 1,845 1,781
Other (Income) Expense (207) (226) (314) (562)
----------------------------------------------
54,916 63,251 161,165 173,771
----------------------------------------------
Income Before Income Taxes 2,019 2,274 3,980 4,815
Income Tax Expense 807 856 1,490 1,922
----------------------------------------------
Net Income $ 1,212 $ 1,418 $ 2,490 $ 2,893
----------------------------------------------
----------------------------------------------
Earnings Per Common Share
(Note 6) $ 0.12 $ 0.14 $ 0.25 $ 0.29
----------------------------------------------
----------------------------------------------
Average Number of Common
Shares Outstanding 10,129 9,959 10,141 9,946
----------------------------------------------
----------------------------------------------
Cash Dividend per Common
Share $ - $ - $ - $ -
----------------------------------------------
----------------------------------------------
See Notes to Condensed Consolidated Financial Statements.
L. B. FOSTER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Nine Months
Ended September 30,
-----------------------
1997 1996
-----------------------
Cash Flows from Operating Activities:
Net Income $ 2,490 $ 2,893
Adjustments to Reconcile Net Income to Net Cash
Provided (Used) by Operating Activities:
Deferred income taxes 1,437 1,922
Depreciation and amortization 1,943 2,277
Gain on sale of property, plant and
equipment (113) (512)
Change in Operating Assets and Liabilities:
Accounts receivable 5,373 (3,793)
Inventories (5,192) (2,094)
Property held for resale (32) 1,333
Other current asset (9) 316
Other non-current assets (317) (852)
Accounts payable-trade (5,911) 1,208
Accrued payroll and employee benefits (857) 476
Other current liabilities (1,029) (1,457)
Other liabilities 64 584
--------------------
Net Cash (Used) Provided by
Operating Activities (2,153) 2,301
--------------------
Cash Flows from Investing Activities:
Proceeds from sale of property, plant
and equipment 1,542 1,986
Capital expenditures on property, plant
and equipment (1,505) (1,929)
Purchase of DM&E stock (1,500)
Acquisition of business (2,500)
--------------------
Net Cash (Used) Provided by
Investing Activities (3,963) 57
--------------------
Cash Flows from Financing Activities:
Proceeds from issuance of revolving
credit agreement borrowings 7,000 (1,755)
Exercise of stock options 540 120
Treasury shares purchased (513)
Payments of capital leases (1,056) (955)
--------------------
Net Cash Provided (Used) by
Financing Activities 5,971 (2,590)
--------------------
Net Decrease in Cash and Cash Equivalents (145) (232)
Cash and Cash Equivalents at Beginning
of Period 1,201 1,325
--------------------
Cash and Cash Equivalents at End of Period $ 1,056 $ 1,093
--------------------
--------------------
Supplemental Disclosures of Cash Flow Information:
Interest Paid $ 1,788 $ 1,775
--------------------
--------------------
Income Taxes Paid $ 585 $ 343
--------------------
--------------------
During 1997 and 1996, the Company financed the purchase of
certain capital expenditures totaling $33,500 and $137,000,
respectively, through the issuance of capital leases.
See Notes to Condensed Consolidated Financial Statements.
L. B. FOSTER COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all estimates and adjustments (consisting
of normal recurring accruals) considered necessary for a fair
presentation have been included, however, actual results could
differ from those estimates. The results of operations for
these interim periods are not necessarily indicative of the
results that may be expected for the year ended December 31,
1997. For further information, refer to the consolidated
financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended December 31, 1996.
2. ACCOUNTING PRINCIPLES
In October 1995, the FASB issued Statement of Financial
Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based
Compensation". The Company follows the requirements of
Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," in accounting for stock-based
compensation. The Company provides, when material, the pro
forma disclosures required by SFAS No. 123.
In June 1997, the FASB issued SFAS No. 130, "Reporting
Comprehensive Income" and SFAS No. 131, "Disclosures About
Segments of an Enterprise and Related Information". The Company
does not anticipate that the reporting requirements of SFAS No.
130 or SFAS No. 131 will have a material impact on existing disclosures.
3. ACCOUNTS RECEIVABLE
Credit is extended on an evaluation of the customer's financial
condition and, generally, collateral is not required. Credit
terms are consistent with industry standards and practices.
Trade accounts receivable at September 30, 1997 and December 31,
1996 have been reduced by an allowance for doubtful accounts of
$2,027,000 and $1,803,000, respectively. Bad debt expense was
$224,000 and $35,000 for the nine month periods ended September
30, 1997 and 1996, respectively.
4. INVENTORIES
Inventories of the Company at September 30, 1997 and December
31, 1996 are summarized as follows (in thousands):
September 30, December 31,
1997 1996
---------------------------------
Finished goods $ 36,650 $ 31,347
Work-in-process 11,503 11,117
Raw materials 3,163 3,135
---------------------------------
Total inventories at current costs: 51,316 45,599
(Less):
Current costs over LIFO
stated values (2,349) (2,074)
Reserve for decline in market
value of inventories (600) (600)
--------------------------------
$ 48,367 $ 42,925
--------------------------------
--------------------------------
Inventories of the Company are generally valued at the lower of
last-in, first-out (LIFO) cost or market. Other inventories of
the Company are valued at average cost or market, whichever is
lower. An actual valuation of inventory under the LIFO method
can be made only at the end of each year based on the inventory
levels and costs at that time. Accordingly, interim LIFO
calculations must necessarily be based on management's estimates
of expected year-end levels and costs.
5. SHORT-TERM BORROWINGS
The Company maintains a $45,000,000 revolving credit agreement.
The interest rate is, at the Company's option, based on the
prime rate, the domestic certificate of deposit rate (CD rate)
or the Euro-bank rate. The interest rates are adjusted
quarterly based on the fixed charge coverage ratio defined in
the agreement. The ranges are prime to prime plus 0.25%, the CD
rate plus 0.45% to the CD rate plus 1.125%, and the Euro-bank
rate plus 0.45% to the Euro-bank rate plus 1.125%. Borrowings
under the agreement, which expires July 1, 1999, are secured by
accounts receivable and inventory.
The agreement includes financial covenants requiring a minimum
net worth, a fixed charge coverage ratio, a leverage ratio and a
current ratio. The agreement also places restrictions on
dividends, investments, capital expenditures, indebtedness and
sales of certain assets.
6. EARNINGS PER COMMON SHARE
Earnings per common share are computed by dividing net income by
the average number of Class A common shares and common stock
equivalents outstanding during the periods ended September 30,
1997 and 1996 of approximately 10,141,000 and 9,946,000, respectively.
Common stock equivalents are the net additional number of shares
which would be issuable upon the exercise of the outstanding
common stock options, assuming that the Company used the
proceeds to purchase additional shares at market value. Common
stock equivalents had no material effect on the computation of
earnings per share for the periods ending September 30, 1997 and 1996.
In February 1997, the Financial Accounting Standards Board
issued Statement No. 128, "Earnings per Share", which is
required to be adopted on December 31, 1997. At that time, the
Company will be required to change the method currently used to
compute earnings per share and to restate all prior periods.
Under the new requirements for calculating primary earnings per
share, the dilutive effect of stock options will be excluded.
The impact of Statement 128 on the calculations of primary and
fully diluted earnings per share for the periods ended
September 30, 1997 and September 30, 1996 is not material.
7. COMMITMENTS AND CONTINGENT LIABILITIES
The Company is subject to laws and regulations relating to the
protection of the environment. While it is not possible to
quantify with certainty the potential impact of actions
regarding environmental matters, particularly any future
remediation and other compliance efforts, in the opinion of
management, compliance with the present environmental protection
laws will not have a material adverse effect on the financial
position, competitive position, or capital expenditures of the
Company. The Company will provide for any liability as defined
in SOP 96-1,"Environmental Remediation Liabilities. However,
the Company's efforts to comply with increasingly stringent
environmental regulations may have an adverse effect on the
Company's future earnings.
The Company is subject to legal proceedings and claims which
arise in the ordinary course of its business. In the opinion of
management, the amount of ultimate liability with respect to
these actions will not materially effect the financial position
of the Company.
At September 30, 1997, the Company had outstanding letters of
credit of approximately $917,000.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------------------------
1997 1996 1997 1996
---------------------------------------------
(Dollars in thousands)
Net Sales:
Rail Products $ 30,653 $ 28,968 $ 79,802 $ 77,596
Construction Products 11,981 18,921 45,164 58,602
Tubular Products 14,301 17,636 40,179 42,388
--------------------------------------------
Total Net Sales 56,935 65,525 165,145 178,586
--------------------------------------------
--------------------------------------------
Gross Profit:
Rail Products 4,140 4,028 10,573 11,091
Construction Products 2,588 2,569 7,452 7,940
Tubular Products 1,694 2,014 4,559 3,973
---------------------------------------------
Total Gross Profit 8,422 8,611 22,584 23,004
---------------------------------------------
Expenses:
Selling and admin-
istrative expenses 5,946 5,957 17,073 16,970
Interest Expense 664 606 1,845 1,781
Other (income) expense (207) (226) (314) (562)
---------------------------------------------
Total Expenses 6,403 6,337 18,604 18,189
---------------------------------------------
Income Before Income Taxes 2,019 2,274 3,980 4,815
Income Tax Expense 807 856 1,490 1,922
---------------------------------------------
Net Income $ 1,212 $ 1,418 $ 2,490 $ 2,893
---------------------------------------------
---------------------------------------------
Gross Profit %:
Rail Products 13.5% 13.9% 13.2% 14.3%
Construction Products 21.6% 13.6% 16.5% 13.5%
Tubular Products 11.8% 11.4% 11.3% 9.4%
---------------------------------------------
Total Gross Profit 14.8% 13.1% 13.7% 12.9%
---------------------------------------------
---------------------------------------------
Third Quarter 1997 Results of Operations
The net income for the 1997 third quarter was $1.2 million or
$0.12 per share on net sales of $57 million. This compares to a
1996 third quarter net income of $1.4 million or $0.14 per share
on net sales of $66 million.
Rail products' third quarter net sales were 6% higher in 1997
than in 1996. Higher relay rail and transit products sales were
partially offset by unexpected delays in shipments of rail
products caused by the current and hopefully temporary lack of
availability of rail cars. Construction products' third quarter
net sales decreased 37% from the year earlier quarter. This
decline was due primarily to the loss of our sheet piling
producer which offset increases in rental piling activity.
Tubular products' net sales in the quarter were 19% lower than
the year earlier quarter as Fosterweld and coating activity
declined. Changes in net sales are primarily the result of
changes in volume rather than changes in prices.
The gross margin percentage for the total Company in the 1997
third quarter increased to 15% from 13% in the 1996 third
quarter. Rail products' gross margin percentage remained
approximately 14% while Construction products' gross margin
percentage increased from 14% to 22% as a result of the reduced
volume of lower margin piling sales. The gross margin
percentage for tubular products increased slightly to 12% as a
result of higher margins on sales of all tubular products.
Selling and administrative expenses did not change in comparison
to the same period last year despite startup costs incurred with
the Monitor Group acquisition. Interest expense increased 9%
from the year earlier quarter due to higher borrowing costs
resulting from the increased investment in other assets and
inventory associated with the purchase of Bethlehem Steel's
remaining sheet piling production.
First Nine Months of 1997 Results of Operations
Net income for the first nine months of 1997 was $2.5 million or
$0.25 per share on net sales of $165 million. This compares to
net income of $2.9 million or $0.29 per share for the first nine
months of 1996 on net sales of $179 million.
Rail products' net sales year to date were $80 million, a 3%
increase over the same period last year. Construction products'
net sales declined 23% due to the shut down of our major piling
producer and the decision to terminate the pile driving
equipment division. Also, construction products' sales in the
first nine months of 1996 benefited from a large shipment of
fabricated products to the Chesapeake Bay bridge tunnel project.
Tubular products' net sales were $40 million in the first nine
months of 1997 and $42 million in 1996.
The Company's gross margin percentage for the first nine months
of 1997 increased to 14% as compared to 13% in the same period
last year. Rail products' gross margin percentage declined from
14% to 13% while construction products' gross margin increased
to 17% from 14%. This increase is the result of the reduced
volume of lower margin piling sales. The gross margin
percentage for tubular products increased to 11% from 9% due to
higher margins on sales of coated and threaded products.
Selling and administrative expenses for the first nine months of
1997 and 1996 were unchanged at $17 million. The change in the
state income tax provision in the second quarter of 1997,
lowered the effective rate by approximately 3% for the first
nine months of 1997 compared to the first nine months of 1996.
Liquidity and Capital Resources
The Company's ability to generate internal cash flow
("liquidity") results from the sale of inventory and the
collection of accounts receivable. During the first nine months
of 1997, the average turnover rate for inventory was the same as
the prior year. The turnover rate for accounts receivable
during the first nine months of 1997 was higher than during the
same period of the prior year due to an increase in collection
rate. Working capital at September 30, 1997 was $63.0 million
compared to $63.5 million at December 31, 1996.
Year to date 1997, the Company had capital expenditures of $1.5
million. In addition, the Company purchased the assets of the
Monitor Group for $2.5 million, increased its investment in the
Dakota, Minnesota & Eastern Railroad Corporation by $1.5
million, and repurchased $0.5 million of its common stock in
accordance with the Company's previously announced buy-back
program. Excluding acquisitions, capital expenditures in 1997
are not expected to exceed $2.0 million and are anticipated to
be funded by cash flow from operations.
Total revolving credit agreement borrowings at September 30,
1997 were $31.9 million or an increase of $7.9 million from the
end of the prior year. At September 30, 1997, the Company had
approximately $13.1 million in available unused borrowing
commitment. Management believes its internal and external
sources of funds are adequate to meet anticipated needs.
Other Matters
The Company owns 13% of the Dakota, Minnesota & Eastern Railroad
Corporation (DM&E), a privately-held, regional railroad which
operates over 1,100 miles of track in five states. The
Company's investment in the DM&E's stock is recorded in the
Company's accounts at its historical cost of $1.7 million
including, $0.2 million of common stock and $1.5 million of the
DM&E's Series B Preferred Stock and warrants. Although its
market value is not readily determinable, management believes
that this investment, without taking into account the DM&E's
proposed Powder River Basin project, is worth significantly more
than its historical cost.
The DM&E announced in June, 1997 that it plans to build
approximately 250 miles of new railroad as an extension from the
DM&E's existing line into the low sulfur coal market of the
Powder River Basin in Wyoming and to rebuild approximately 650
miles of its existing track (the "Project"). The DM&E also has
announced that the estimated cost of this Project is $1.2
billion. The Project is subject to approval by the Surface
Transportation Board and the Project is scheduled to be
completed within 5 years if the DM&E is able to obtain the
required financing in connection with the Project. Morgan
Stanley & Co. Inc. has been retained by the DM&E to assist in
identifying strategic partners or potential acquirers of all or
substantially all of the equity of the DM&E. The DM&E has
stated that the DM&E could repay project debt and cover its
operating costs if it captures a 5% market share in the Powder
River Basin. If the Project proves to be viable, or if
acquirers are obtained for all or substantially all of the
DM&E's equity, management believes that the value of the
Company's investment in the DM&E should increase dramatically.
As stated previously, the Company intends to divest its
Fosterweld operations but does not expect to complete any sale
in the near-term. Additionally, the Company has terminated its
pile driving equipment business through sales and leases of its
remaining assets.
On May 6, 1997 the Company acquired the assets of the Monitor
Group. The Monitor Group designs, develops and assembles
portable mass spectrometers. Mass spectrometers are used to
measure gas compositions and concentrations for various
applications, including monitoring air quality for the mining
industry and serving as a process monitor and diagnostic tool in
chemical manufacturing industries. For the balance of 1997, the
Company anticipates that the Monitor Group's operating costs
will exceed the Division's revenue.
Management continues to evaluate the overall performance of
certain operations. A decision to terminate an existing
operation could have a material effect on near-term earnings but
would not be expected to have a material adverse effect on the
financial condition of the Company.
Outlook
As previously disclosed, the Company's primary supplier of hot
rolled sheet piling products has ceased operations as of March,
1997. The Company has agreed to become the exclusive
distributor of sheet piling for Chaparral Steel when it enters
this market. Chaparral has announced a plan to build a new
facility to produce sheet piling and expects to begin operations
in 1999.
The rail segment of the business depends on one source for
fulfilling certain trackwork contracts. The Company has
provided $5.8 million of working capital to this supplier in the
form of loans and advanced payments. If, for any reason, this
supplier is unable to perform, the Company could experience a
negative short term effect on earnings.
The Company's operations are in part dependent on governmental
funding of infrastructure projects. Significant changes in the
level of government funding of these projects could have a
favorable or unfavorable impact on the operating results of the
Company. Additionally, governmental actions concerning
taxation, tariffs, the environment or other matters could impact
the operating results of the Company. The Company's operations
results may also be affected by the weather.
Although backlog is not necessarily indicative of future
operating results, total Company backlog at September 30, 1997,
was approximately $67 million. This does not include the
running rail portion of the previously awarded Tren-Urbano
project which will have a minimum value of $8 million. If this
project was included in the following table, Rail Products'
backlog would be, at a minimum, $46 million and the total
backlog would be $75 million.
Backlog
- ----------------------------------------------------------------------------
September 30, December 31,
1997 1996 1996
- ----------------------------------------------------------------------------
(Dollars in thousands)
Rail Products $ 38,344 $ 49,009 $ 36,100
Construction Products 21,615 27,256 28,080
Tubular Products 6,988 9,585 11,328
- ----------------------------------------------------------------------------
Total Backlog $ 66,947 $ 85,850 $ 75,508
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Forward-Looking Statements
Statements relating to the potential value or viability of the
DM&E or the Project, or management's belief as to such matters,
are forward-looking statements and are subject to numerous
contingencies and risk factors. The Company has based its
assessments on information provided by the DM&E and has not
independently verified such information. In addition to matters
mentioned above, factors which could adversely affect the value
of the DM&E, its ability to complete the Project or the
viability of the Project include the following: any failure to
meet the requirements of the DM&E's credit agreements,
insufficient capital or operating cash flows, adverse weather
conditions, labor disputes, any inability to obtain necessary
environmental and other governmental approvals for the Project
in a timely fashion, an inability to obtain financing for the
Project, competitors' responses to the Project (such as cutting
coal-freight rates), changes in the demand for coal or
electricity and changes in environmental and other laws and
regulations.
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 made from
time to time in news releases, reports, proxy statements,
registration statements and other written communications
(including the preceding sections of this Management's
Discussion and Analysis), as well as oral statements made from
time to time by representatives of the Company. Except for
historical information, matters discussed in such oral and
written communications are forward-looking statements that
involve risks and uncertainties, including but not limited to
general business conditions, the availability of material from
major suppliers, the impact of competition, the seasonality of
the Company's business, taxes, inflation and governmental
regulations.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
See Note 7, "Commitments and Contingent Liabilities", to the
Condensed Consolidated Financial Statements.
Item 2. CHANGES IN SECURITIES
a) CHANGES IN DOCUMENTS DEFINING RIGHTS OF REGISTERED SECURITIES
As stated on Form 8-K, dated June 2, 1997, the Company's Board of Directors
declared a dividend of common share purchase rights as a part of a
Stockholder Rights Plan on May 15, 1997. Under the terms of the Plan, stock
purchase rights were distributed at the rate of one right for each share of
Class A Common Stock held as of the close of business on May 21, 1997.
Stockholders did not actually receive certificates for the rights at that
time, but the rights became part of each common share. The number of rights
outstanding is subject to adjustment under certain circumstances and all
rights expire on May 15, 2007.
Each right will entitle holders of the Company's Class A Common Stock to buy
one share of Class A Common Stock of the Company at an exercise price of
$30.00, subject to adjustment. The rights will be exercisable and will trade
separately from the common shares only if a person or group acquires
beneficial ownership of 20% or more of the Company's common shares or
commences a tender or exchange offer that, if culminated, would result in
such person or group owning 20% or more of the common shares. Only when
one or more of these events occur will stockholders receive certificates
for the rights.
If any person actually acquires 20% or more of the shares (other than
through an offer for all shares that provide fair value for such shares)
or if a 20%-or-more stockholder engages in a merger or other business
combination in which the Company survives and its common shares remain
outstanding, the other stockholders will be able to exercise the rights and
receive the Company's common shares (or in certain other circumstances,
cash, property or other securities of the Company) having twice the value of
the exercise price of the rights. Additionally, if the Company is involved
in certain other mergers where its shares are exchanged or certain major
sales of its assets occur, stockholders will be able to purchase the other
party's shares in an amount equal to twice the value of the exercise price
of the rights.
The Company will generally be entitled to redeem the rights at $0.05 per
right at any time until the 10th day following public announcement that a
person has acquired a 20% ownership position in Company common shares. The
Company may in its discretion extend the period during which it can redeem
the rights.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a) EXHIBITS
Unless marked by an asterisk, all exhibits are incorporated herein
by reference:
3.1 Restated Certificate of Incorporation as amended to date
filed as Exhibit 3.1 to Form 10-Q for the quarter ended
March 31, 1987.
3.2 Bylaws of the Registrant, as amended to date, filed as
Exhibit 3.2 to Form 10-K for the year ended December 31,
1993.
4A Rights Agreement, dated as of May 15, 1997, between
L. B. Foster Company and American Stock Transfer & Trust
Company, including the form of Rights Certificate and the
Summary of Rights attached thereto, filed as Exhibit 4A
to Form 8-A dated May 23, 1997.
4.1 Amended and Restated Loan Agreement by and among the
Registrant and Mellon Bank, N.A., NBD Bank, and
Corestates Bank, N.A. dated as of November 1, 1995 and
filed as Exhibit 4.1 to Form 10-K for the year ended
December 31, 1995.
10.15 Lease between the Registrant and Amax, Inc. for
manufacturing facility at Parkersburg, West Virginia,
dated as of October 19, 1978, filed as Exhibit 10.15 to
Registration Statement No. 2-72051.
10.16 Lease between Registrant and Greentree Building
Associates for Headquarters office, dated as of June 9,
1986, as amended to date, filed as Exhibit 10.16 to Form
10-K for the year ended December 31, 1988.
10.16.1 Amendment dated June 19, 1990 to lease between Registrant
and Greentree Building Associates, filed as Exhibit
10.16.1 to Form 10-Q for the quarter ended June 30, 1990.
10.16.2 Amendment dated May 29, 1997 to lease between Registrant
and Greentree Building Associates. Filed as Exhibit 10.16.2
to Form 10-Q for the quarter ended June 30, 1997.
10.19 Lease between the Registrant and American Cast Iron Pipe
Company for Pipe Coating Facility in Birmingham, Alabama
dated December 11, 1991 and filed as Exhibit 10.19 to
Form 10-K for the year ended December 31, 1991.
10.19.1 Amendment to Lease between the Registrant and American
Cast Iron Pipe Company for Pipe Coating Facility in
Birmingham, Alabama dated April 15, 1997.
10.33.2 Amended and Restated 1985 Long-Term Incentive Plan, as
amended and restated July 30, 1997. Filed as Exhibit
10.33.2 to Form 10-Q for the quarter ended June 30, 1997. **
10.45 Medical Reimbursement Plan filed as Exhibit 10.45 to Form
10-K for the year ended December 31, 1992. **
10.46 Leased Vehicle Plan as amended to date. Filed as Exhibit
10.46 to Form 10-K for the year ended December 31, 1993.
**
10.49 Lease agreement between Newport Steel Corporation and
L.B. Foster Company dated as of October 12, 1994 and
filed as Exhibit 10.49 to Form 10-Q for the quarter ended
September 30, 1994.
10.50 L. B. Foster Company 1997 Incentive Compensation Plan.
Filed as Exhibit 10.50 to Form 10-K for the year ended
December 31, 1996. **
10.51 Supplemental Executive Retirement Plan. Filed as Exhibit
10.51 to Form 10-K for the year ended December 31, 1994.
**
19 Exhibits marked with an asterisk are filed herewith.
** Identified management contract or compensatory plan or
arrangement required to be filed as an exhibit.
b) REPORTS ON FORM 8-K
On June 2, 1997, the Registrant filed a Current Report on Form 8-K
announcing that L. B. Foster Company declared a dividend distribution
of stock purchase rights.
SIGNATURE
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 thereunto duly authorized.
L. B. FOSTER COMPANY
(Registrant)
Date: November 7, 1997
By /s/ Roger F. Nejes
----------------------------
Roger F. Nejes
Sr. Vice President-
Finance and Administration
& Chief Financial Officer
(Principal Financial Officer
and Duly Authorized Officer
of Registrant)
5
1,000
9-MOS
DEC-31-1997
SEP-30-1997
1,056
0
44,545
2,027
48,367
94,375
49,643
26,827
124,382
31,347
20,833
0
0
102
69,698
124,382
165,145
165,145
142,561
142,561
0
0
1,845
3,980
1,490
2,490
0
0
0
2,490
.25
.25
