UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASES, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES AND 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, 2004.
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 Voluntary Investment 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 Voluntary Investment Plan
Years Ended December 31, 2004 and 2003
With Report of Independent Auditors
L. B. Foster Company
Voluntary Investment Plan
Financial Statements
and Other Financial Information
Years Ended December 31, 2004 and 2003
Contents
Report of Independent Auditors........................................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).......10
Exhibit Index........................................................11
Signature............................................................12
1
Report of Independent Registered Public Accounting Firm
The Plan Administrator
L. B. Foster Company
Voluntary Investment Plan
We have audited the accompanying statements of net assets available for benefits
of L. B. Foster Company Voluntary Investment Plan as of December 31, 2004 and
2003, and the related statement of changes in net assets available for benefits
for the year ended December 31, 2004. 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, 2004 and 2003, and the changes in its net assets available for
benefits for the year ended December 31, 2004, 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, 2004, 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, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
June 13, 2005
2
L. B. Foster Company
Voluntary Investment Plan
Statements of Net Assets Available for Benefits
December 31
2004 2003
-----------------------------------
Assets
Investments, at fair value $33,594,419 $31,655,890
Participant loans 518,121 541,339
-----------------------------------
34,112,540 32,197,229
Receivables:
Employee 83,243 85,404
Employer 192,350 251,932
Other 162 65
-----------------------------------
275,755 337,401
-----------------------------------
Net assets available for benefits $34,388,295 $32,534,630
===================================
See accompanying notes.
3
L. B. Foster Company
Voluntary Investment Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2004
Additions
Investment income:
Interest and dividends $ 1,020,150
Net realized/unrealized appreciation in investment fair value 2,443,047
-----------
Total investment income 3,463,197
Contributions:
Employee 1,368,857
Employer 667,363
-----------
Total contributions 2,036,220
-----------
5,499,417
Deductions
Benefit payments 3,645,752
-----------
3,645,752
-----------
Increase in net assets available for benefits 1,853,665
Net assets available for benefits, beginning of year 32,534,630
-----------
Net assets available for benefits, end of year $34,388,295
===========
See accompanying notes.
4
L. B. Foster Company
Voluntary Investment Plan
Notes to Financial Statements
December 31, 2004 and 2003
1. Description of Plan
- ----------------------
The following brief description of the L. B. Foster Company Voluntary Investment
Plan (the Plan) as amended effective January 1, 1999, is provided for general
information purposes only. Participants should refer to the summary plan
description for more complete information.
General
- -------
The Plan is a defined contribution plan extended to all eligible salaried
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. Employees may contribute up to 30% of their
annual compensation 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.
Beginning the first of the month following 12 months of employment, the Company
provides a 50% match of the participant's primary contribution on the first 4%
to 6% of annual compensation, based on years of service, as defined by the Plan.
Beginning the first of the month following 12 months of employment, the Company
contributes a fixed amount equal to 1% of eligible employees' annual
compensation regardless of whether the employee elects to contribute to the
Plan. Company contributions may be reduced by forfeitures that accumulate.
The Plan also requires an additional matching employer contribution of up to
$.50 for each $1.00 of eligible pretax contributions based on a target ratio of
the Company's annual pretax income to equity as defined in the Plan. No
additional matching employer contributions were made in 2004 and 2003.
5
1. Description of Plan (continued)
- ----------------------------------
The Company, upon resolution of the Board of Directors, may make a discretionary
additional contribution of an amount out of, but not in excess of, the Company's
current or accumulated profits. Discretionary contributions of $154,000 and
$213,000 were approved for 2004 and 2003, respectively. The Company's
contributions may be reduced by any forfeitures which accumulate from
terminations of participants with nonvested employer contributions. Forfeitures
totaling $3,200 and $27,900 were utilized to offset contributions in 2004 and
2003, respectively. At December 31, 2004 and 2003, forfeitures of $9,300 and
$6,200, 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 that are active
as of January 1, 2002, or later are 100% vested in the Company's contributions
after three years of eligible service or after attaining age 65. Participants
that are inactive as of or terminated prior to January 1, 2002, are 100% vested
in the Company's contributions after five years of eligible service or after
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. 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.
6
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 attributable to matching, fixed and
discretionary contributions, and related earnings.
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 their 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 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 an interest rate computed at the prime rate plus 0.5%. 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.
7
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 fixed rate 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
consisting primarily 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 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.
8
3. Investments
- --------------
Profit sharing contributions are directed into the L. B. Foster Company Stock
Fund. Participants may subsequently transfer profit sharing contributions into
other plan funds at their discretion. The L. B. Foster Company Stock Fund is a
unitized stock fund comprised of a 95% to 99% investment in L. B. Foster Company
common stock with the remaining 1% to 5% invested in a short-term investment
fund. As a result, participant accounts receive units of participation in the
fund rather than common shares.
For the year ended December 31, 2004, the Plan's investments (including
investments bought, sold, and held during the year) appreciated (depreciated) in
value as follows:
Net Realized/
Fair Unrealized
Market Appreciation
Value (Depreciation)
-----------------------------------
Fidelity investments:
Magellan Fund $ 4,829,391 $ 270,912
Equity Income Fund 3,290,364 174,626
Growth and Income Fund 3,632,852 255,585
Government Income Fund 2,068,563 3,122
Blue Chip Fund 189,240 8,883
Asset Manager Fund 987,022 27,920
Low Price Stock Fund 2,384,917 284,719
Small Cap Stock Fund 735,594 36,237
Freedom Income Fund 40,175 569
Freedom 2000 430,133 8,792
Freedom 2010 635,099 25,975
Freedom 2020 689,829 42,348
Freedom 2030 178,018 13,312
Freedom 2040 105,388 5,750
Managed Income Fund 2,015,495 -
Retirement Government Money Market Fund 2,452,121 -
Spartan U.S. Equity Index Fund 3,000,252 252,145
Janus Worldwide Fund - 39,255
Credit Suisse Emerging Growth Fund 779,831 106,465
PIMCO Total Return Fund 372,446 (1,211)
MSI International Equity Fund 2,537,223 170,452
L. B. Foster Company Stock Fund 2,240,466 717,191
-----------------------------------
$ 33,594,419 $ 2,443,047
===================================
9
3. Investments (continued)
- --------------------------
The fair value of investments representing 5% or more of the Plan's assets at
December 31, 2004 and 2003, is as follows:
2004 2003
--------------- --------------
Fidelity investments:
Magellan Fund $ 4,829,391 $ 5,906,948
Equity Income Fund 3,290,364 2,644,991
Growth and Income Fund 3,632,852 3,868,823
Government Income Fund 2,068,563 2,183,722
Low Price Stock Fund 2,384,917 1,105,633
Retirement Government Money Market Fund 2,452,121 3,476,427
Managed Income Fund 2,015,495 2,439,606
Spartan U.S. Equity Index Fund 3,000,252 2,375,468
MSI International Equity Fund 2,537,223 493,920
Janus Worldwide Fund - 1,702,147
L. B. Foster Company Stock Fund 2,240,466 1,633,482
4. Income Tax Status
- --------------------
The Plan has received a determination letter from the Internal Revenue Service
(IRS) 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. 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 sponsor has indicated that
it will take the necessary steps, if any, to bring the Plan's operations into
compliance with the Code.
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
10
L. B. Foster Company
Voluntary Investment Plan
EIN #25-1324733 Plan #201
Schedule H, Line 4i - Schedule of Assets
(Held at End of Year)
December 31, 2004
Identity of Issue, Borrower, Shares Fair Market
Lessor, or Similar Party Description of Investment Held Value
- -------------------------------------------------------------------------------------------------------------------
Fidelity Investments*:
Magellan Fund Equities 46,530 $ 4,829,391
Equity Income Fund Equities 62,341 3,290,364
Growth and Income Fund Equities 95,076 3,632,852
Government Income Fund Government obligations 202,008 2,068,563
Blue Chip Fund Equities 4,537 189,240
Asset Manager Fund Equities, money market, bonds 60,890 987,022
Low Price Stock Fund Equities 59,253 2,384,917
Small Cap Stock Fund Equities 40,506 735,594
Freedom Income Fund Equity funds, fixed income funds 3,565 40,175
Freedom 2000 Equity funds, fixed income funds 35,607 430,133
Freedom 2010 Equity funds, fixed income funds 46,630 635,099
Freedom 2020 Equity funds, fixed income funds 49,415 689,829
Freedom 2030 Equity funds, fixed income funds 12,643 178,018
Freedom 2040 Equity funds, fixed income funds 12,743 105,388
Managed Income Fund Guaranteed investment contracts 2,015,495 2,015,495
Retirement Government Money Market Fund Government obligations, money 2,452,121 2,452,121
market securities
Spartan U.S. Equity Index Fund Equities 70,001 3,000,252
Credit Suisse Emerging Growth Fund Equities 25,059 779,831
PIMCO Total Return Fund Fixed income securities 34,906 372,446
MSI International Equity Fund Equities 121,689 2,537,223
- -------------------------------------------------------------------------------------------------------------------
Total mutual funds 31,353,953
L. B. Foster Company Stock Fund Interest-bearing cash 111,443 111,443
Common stock 223,872 2,129,023
- -------------------------------------------------------------------------------------------------------------------
2,240,466
Outstanding participant loans Participant loans, interest rates
ranging from 4.5% to 10.50%,
various maturities ranging
from 2 to 30 years 518,121
- -------------------------------------------------------------------------------------------------------------------
$ 34,112,540
===================================================================================================================
*Party in interest
11
EXHIBIT INDEX
Exhibit 23.1 Consent of Independent Registered Public Accounting Firm
12
SIGNATURE
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 their behalf by the undersigned
hereunto duly authorized.
L. B. Foster Company
Voluntary Investment Plan
----------------------------------
(Name of Plan)
Date: June 24, 2005 By: /s/David J. Russo
----------------------------------
David J. Russo
Senior Vice President,
Chief Financial Officer and
Treasurer
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 Voluntary Investment
Plan of our report dated June 13, 2005, with respect to the financial statements
and schedule of the L. B. Foster Company Voluntary Investment Plan included in
this Annual Report (Form 11-K) for the year ended December 31, 2004.
June 24, 2005 /s/Ernst & Young LLP