SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the years ended December 31, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-10436
L. B. Foster Company Retirement Savings Plan for Non-Union Hourly Employees
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(Full title of the plan and the address of the plan, if different from that
of the issuer named below)
L. B. FOSTER COMPANY
415 Holiday Drive
Pittsburgh, PA 15222
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(Name of issuer of the securities held pursuant to the Plan and the address of
principle executive office)
L. B. Foster Company
Retirement Savings Plan for
Non-Union Hourly Employees
Financial Statements
and Other Financial Information
Years ended December 31, 1999 and 1998
Contents
Report of Independent Auditors ......................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits......................2
Statements of Changes in Net Assets Available for Benefits...........3
Notes to Financial Statements .......................................4
Other Financial Information
Schedule H, Line 4(i)--Schedule of Assets Held for
Investment Purposes at End of Year.................................11
Report of Independent Auditors
Plan Administrator
L. B. Foster Company
Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of L. B. Foster Company Retirement Savings Plan for Non-Union Hourly Employees
as of December 31, 1999 and 1998, and the related statements of changes in net
assets available for benefits for the years then ended. 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 auditing standards generally accepted
in the 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as 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, 1999 and 1998, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
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 for investment purposes at end of year as of December 31, 1999 is presented
for purpose 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, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
May 18, 2000
L. B. Foster Company
Retirement Savings Plan for
Non-Union Hourly Employees
Statements of Net Assets Available for Benefits
December 31
1999 1998
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Assets
Investments at fair value $1,261,948 $1,114,045
Participant loans 91,022 53,852
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1,352,970 1,167,897
Receivables:
Employee 13,977 14,099
Employer 3,191 3,276
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17,168 17,375
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Net assets available for benefits $1,370,138 $1,185,272
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See accompanying notes.
L. B. Foster Company
Retirement Savings Plan for
Non-Union Hourly Employees
Statements of Changes in Net Assets Available for Benefits
Year ended December 31
1999 1998
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Additions:
Investment income:
Interest and dividends $ 77,053 $ 59,218
Net realized/unrealized
appreciation in investment
fair value 80,981 95,229
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Total investment income 158,034 154,447
Contributions:
Employee 143,292 190,767
Employer 20,315 28,901
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Total contributions 163,607 219,668
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Total additions 321,641 374,115
Deductions:
Benefit payments 136,775 183,950
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136,775 183,950
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Increase in net assets available
for benefits 184,866 190,165
Net assets available for benefits,
beginning of year 1,185,272 995,107
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Net assets available for benefits,
end of year $1,370,138 $1,185,272
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See accompanying notes.
L. B. Foster Company
Retirement Savings Plan for
Non-Union Hourly Employees
Notes to Financial Statements
December 31, 1999
1. Description of Plan
The following brief description of the L. B. Foster Company Retirement Savings
Plan (the Plan) is provided for general information purposes only. Participants
should refer to the summary plan description as amended on January 1, 1999 for
more complete information.
General
The Plan is a defined contribution plan extended to all eligible hourly
employees of L. B. Foster Company (the Company) who have attained age 21 and
have completed one year of qualifying service, as defined by the Plan. 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 may elect to make deferred savings contributions on a pretax basis
ranging from 2% to 10% of annual compensation subject to Internal Revenue Code
limitations. A participant who elects to make deferred savings contributions of
at least 5% can also elect to make additional voluntary contributions on an
aftertax basis provided, however, that the sum of the deferred savings and
voluntary employee contributions does not exceed 15% of the participant's annual
compensation. Participant and Company contributions are invested in accordance
with participant elections.
Eligible employees of the Georgetown, Massachusetts facility shall have a
company matching contribution of fifty cents for every dollar contributed by the
employee, up to the first 5% of the employee's compensation. This matching
contribution will only be made if the employee contributes to the Plan. For all
other participants, the Company provides a contribution of twelve cents per
eligible hour worked. The Company's contributions may be reduced by any
forfeitures which accumulate. Forfeitures of $12,850 and $1,728 were utilized to
reduce company contributions in 1999 and 1998, respectively. At December 31,
1999 and 1998, forfeitures of $26 and $1,496, respectively, were available to
reduce future company contributions.
1. Description of Plan (continued)
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 five years of eligible service or attaining
age 65.
Notwithstanding the above, a participant who terminates from the Plan by reason
of retirement, disability or death is fully vested in his participant account.
Distributions
Normal retirement age is 65. Early retirement age is 55, provided 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, or disability retirement, death, or termination of
employment may be made in the form of a direct rollover, annuity, cash, or
partly in cash and partly as an annuity. Upon termination of employment for any
reason, a participant who is entitled to a cash lump-sum distribution may elect
to request the entire vested interest in his account as of the first day of any
calendar quarter following termination. The amount of such distribution is equal
to the participant's vested account balance on the valuation date.
Withdrawals
In the event of hardship and subject to certain restrictions and limitations, as
defined by the plan document, a participant may withdraw his vested interest in
the portion of his account attributable to deferred savings contributions and
related earnings.
1. Description of Plan (continued)
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 from the vested portion of his account, subject
to spousal consent, if applicable. The loan proceeds (subject to a minimum of
$1,000 and a maximum of $50,000) 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 without penalty at any time. The repayment period for a loan that is
obtained for purchasing a primary residence may be as long as 360 months. The
loan carries an interest rate computed at the prime rate plus one-half percent.
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.
Securities traded in the over-the-counter market and listed securities for which
no sale was reported on that date are valued at the average of the last reported
bid and ask quotations. 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
primarily consisting of stocks and bonds. Realization of amounts disclosed as
net assets available for benefits is dependent on the results of these markets.
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.
Use of Estimates
The preparation of financial statements in accordance with 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.
2. Summary of Significant Accounting Policies (continued)
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.
New Accounting Principle
During 1999, the Plan adopted the provisions of AICPA Standard of Position 99-3,
Accounting for and Reporting of Certain Defined Contribution Benefit Plan
Investments and Other Disclosure Matters. This standard was effective for plan
years ending after December 15, 1999. Under this standard, a defined
contribution plan that provides participant-directed investment programs is no
longer required to disclose amounts relating to those individual programs as a
separate fund in the financial statements in columnar form or in the related
disclosures as previously required. Prior year information has been restated to
conform to the current presentation.
3. Investments
Effective January 1, 1999, the Plan was amended to establish an investment
option in which employees may invest contributions in L. B. Foster Company
common stock. The Company has made the necessary filings with the appropriate
regulatory agencies as a result of this amendment.
3. Investments (continued)
During 1999 and 1998, the Plan's investments (including investments bought,
sold, and held during the year) appreciated in value by $80,981 and $95,229,
respectively, as follows:
December 31,
1999 1998
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Net Net
Realized/ Realized/
Fair Unrealized Fair Unrealized
Market Appreciation Market Appreciation
Value (Depreciation) Value (Depreciation)
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Fidelity Investments:
Magellan Fund* $ 270,880 $28,470 $ 196,239 $43,541
Equity Income Fund 15,810 (529) 17,430 1,435
Growth and Income Fund* 240,897 6,680 202,150 29,960
Government Securities Fund* 72,183 (6,417) 79,426 1,306
Asset Manager Fund 33,196 1,288 20,114 (1,401)
Managed Income Fund 20,951 - 14,310 -
Retirement Government Money Market
Fund* 386,491 - 459,941 -
U.S. Equity Index Fund* 93,824 13,043 62,102 10,916
Janus Worldwide Fund* 104,812 34,574 49,883 8,626
Warburg Pincus Emerging Growth Fund
22,050 3,993 12,450 846
L. B. Foster Company Common Stock Fund
854 (121) - -
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$1,261,948 $80,981 $1,114,045 $95,229
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*Investments with fair values representing 5% or more of the Plan's assets at
December 31, 1999.
4. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
(IRS) dated April 22, 1996, stating that the Plan is qualified under Section
401(a) of the Internal Revenue Code of 1986 (the Code) and, therefore, the
related trust is exempt from taxation. Once qualified, the Plan is required to
operate in conformity with the Code to maintain its qualification. The Plan was
amended subsequent to the IRS determination letter. The plan administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan 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.
Other Financial Information
L. B. Foster Company
Retirement Savings Plan for
Non-Union Hourly Employees
EIN 25-1324733 Plan 012
Schedule H, Line 4(i)--Schedule of Assets Held for Investment
Purposes at End of Year
December 31, 1999
Identity of Issue, Borrower, Shares Fair Market
Lessor, or Similar Party Description of Investment Held Value
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Fidelity Investments*:
Magellan Fund Equities 1,983 $ 270,880
Equity Income Fund Equities 296 15,810
Growth and Income Fund Equities 5,108 240,897
Government Securities Fund Government obligations 7,720 72,183
Asset Manager Fund Equities, money market, bonds 1,806 33,196
Managed Income Fund Guaranteed investment contracts 20,951 20,951
Retirement Government Money Market Fund Government obligations, money
market securities 386,491 386,491
U.S. Equity Index Fund Equities 1,801 93,824
Janus Worldwide Fund Equities 1,371 104,812
Warburg Pincus Emerging Growth Fund Equities 442 22,050
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Total mutual funds 1,261,094
L. B. Foster Company Common Stock
Fund Common stock 175 854
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1,261,948
Outstanding participant loans Participant loans, interest rates
ranging from 6.5% to 9.5%,
various maturities ranging
from 1 year to 20 years 91,022
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$1,352,970
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*Party-in-interest
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
members of the Administrative Committee of the Plan have duly caused this
Annual Report to be signed on its behalf by the undersigned hereunto duly
authorized.
L. B. Foster Company
Retirement Savings Plan for
Non-Union Hourly Employees
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(Name of Plan)
June 22, 2000 By /s/ Roger F. Nejes
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(Roger F. Nejes,
Senior Vice President -
Finance and Administration
And Chief Financial Officer)
EXHIBIT INDEX
Exhibit Number Description
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23 Consent of Independent Auditors
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements No.
333-65885 of L.B. Foster Company, as amended and restated, of our report dated
May 18, 2000, with respect to the financial statements and schedule of the L.B.
Foster Company Retirement Savings Plan for Non-Union Hourly Employees included
in this Form 11-K for the year ended December 31, 1999.
/s/ Ernst & Young LLP
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Ernst & Young LLP
Pittsburgh, Pennsylvania
June 22, 2000