UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.
For the fiscal year ended December 31, 2007.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the transition period from ___________to_____________
Commission file number 0-10436.
L. B. Foster Company 401(k) and Profit Sharing Plan
- --------------------------------------------------------------------------------
(Full title of the plan and the address of plan,
if different from that of the issuer named below)
L. B. FOSTER COMPANY
415 Holiday Drive
Pittsburgh, PA 15222
- --------------------------------------------------------------------------------
(Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office)
L. B. Foster Company
401(k) and Profit Sharing Plan
Financial Statements
and Other Financial Information
December 31, 2007 and 2006,
and the Year Ended December 31, 2007
Contents
Report of Independent Registered Public Accounting Firm........................1
Financial Statements
Statements of Net Assets Available for Benefits................................2
Statement of Changes in Net Assets Available for Benefits......................3
Notes to Financial Statements..................................................4
Other Financial Information
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)................12
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Plan Administrator
L. B. Foster Company
401(k) and Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits
of the L. B. Foster Company 401(k) and Profit Sharing Plan (formerly, the L.B.
Foster Company Voluntary Investment Plan) as of December 31, 2007 and 2006, and
the related statement of changes in net assets available for benefits for the
year ended December 31, 2007. 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, 2007 and 2006, and the changes in its net assets available for
benefits for the year ended December 31, 2007, 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, 2007 is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
June 27, 2008
L. B. Foster Company
401(k) and Profit Sharing Plan
Statements of Net Assets Available for Benefits
December 31
2007 2006
------------ ------------
Assets
Investments, at fair value $47,945,591 $39,141,654
Participant loans 685,149 444,114
------------ ------------
48,630,740 39,585,768
Receivables:
Employee - 82,093
Employer 1,000,000 1,058,306
Other 15,671 1,134
------------ ------------
1,015,671 1,141,533
Net assets available for benefits, at fair value 49,646,411 40,727,301
Adjustment from fair value to contract value for
investments in fully benefit-responsive investment contracts 13,768 14,370
------------ ------------
Net assets available for benefits $49,660,179 $40,741,671
============ ============
See accompanying notes.
L. B. Foster Company
401(k) and Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2007
Additions
Investment income:
Interest and dividends $ 2,056,589
Net realized/unrealized appreciation in investment fair value 5,250,029
-----------
Total investment income 7,306,618
Transfer to Plan 1,718,423
Contributions:
Employee 1,774,455
Rollover 240,926
Employer 1,773,928
-----------
Total contributions 3,789,309
-----------
12,814,350
Deductions
Benefit payments 3,889,183
Administrative expenses 6,659
-----------
3,895,842
-----------
Increase in net assets available for benefits 8,918,508
Net assets available for benefits, beginning of year 40,741,671
-----------
Net assets available for benefits, end of year $49,660,179
===========
See accompanying notes.
L. B. Foster Company
401(k) and Profit Sharing Plan
Notes to Financial Statements
December 31, 2007 and 2006
1. Description of Plan
Effective March 1, 2007, the Company merged the L. B. Foster Company Retirement
Savings Plan into the L. B. Foster Company Voluntary Investment Plan. The
consolidated plan became the L. B. Foster Company 401(k) and Profit Sharing
Plan. The following brief description of the L. B. Foster Company 401(k) and
Profit Sharing Plan (the Plan) is provided for general information purposes.
Participants should refer to the summary plan description for more complete
information.
General
The Plan is a defined contribution plan extended to all eligible employees of L.
B. Foster Company (the Company) who have attained age 18. The L. B. Foster
Company Employee Benefits Policy and Review Committee, appointed by the Board of
Directors of the Company, collectively serves as the plan administrator. The
Plan is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA) as amended.
Contributions
Contributions under the Plan are made by both the participants and the Company.
A participant who elects to make pretax contributions of at least the maximum
amount subject to Company matching can also elect to make additional voluntary
contributions on an after-tax basis. Participants may contribute up to 75% of
their annual pre-tax compensation and up to 100% of their compensation on an
after-tax basis, subject to Internal Revenue Code limitations. There is no limit
on aggregate pretax and after-tax contributions. Participant contributions and
employer matching contributions are invested in accordance with participant
elections. In the event that a participant does not make an investment election,
contributions are invested in the Fidelity Freedom funds until such time as an
election is made by the participant. The participant may transfer contributions
defaulted to these funds into other investment options at the participant's
discretion.
The Plan includes a provision for immediate Company match. Participants receive
a Company match of 100% on the first 1% of their eligible compensation and 50%
of the next 6% of their eligible compensation for a maximum Company match of 4%.
To be eligible for the Company matching contributions, participants must make
employee pretax deferral contributions or Roth 401(k) after tax deferral
contributions. The plan will match on the combined total of these contributions
up to the matching limit.
L. B. Foster Company
401(k) and Profit Sharing Plan
Notes to Financial Statements
1. Description of Plan (continued)
The Company, upon resolution of the Board of Directors, may make a discretionary
profit sharing contribution of an amount out of, but not in excess of, the
Company's current or accumulated profits. Discretionary contributions of
$1,000,000 and $626,000 were approved for 2007 and 2006, respectively.
Forfeitures of discretionary contributions are reallocated to the Plan's
remaining, eligible participants. The Company's matching contributions may be
reduced by any forfeitures that accumulate from terminations of participants
with nonvested employer matching contributions. No forfeitures were utilized
during 2007 or 2006. At December 31, 2007 and 2006, forfeitures approximating
$31,400 and $4,800, respectively, were available to reduce future company
contributions. Participants must have attained one year of service as of the
last day of the Plan Year in order to be eligible for the discretionary profit
sharing contribution, if any, for that year.
Vesting
A participant's vested interest in the Plan on any date is equal to the sum of
the values of (a) that portion of the participant's account attributable to the
participant's contributions and (b) that portion of the participant's account
attributable to the Company's contributions multiplied by the applicable vesting
percentage plus or minus related earnings (losses). Participants are 100% vested
in the Company's contributions after two years of eligible service.
Notwithstanding the above, a participant who terminates from the Plan by reason
of retirement, disability, or death is fully vested in their participant
account.
Distributions
Normal retirement age is 65. Early retirement age is 55, provided that the
participant has at least five years of service. In addition, a participant may
obtain an early retirement distribution prior to reaching age 55, provided that
the participant will turn 55 in the year the distribution occurs and that the
participant has at least five years of service.
As provided by the Plan, the distribution to which a participant is entitled by
reason of normal, early, late, or disability retirement, death, or termination
of employment may be made in the form of direct rollover, annuity, cash, or
partly in cash and partly as an annuity. The amount of such distribution is
equal to the participant's vested account balance on the valuation date.
L. B. Foster Company
401(k) and Profit Sharing Plan
Notes to Financial Statements
1. Description of Plan (continued)
Withdrawals
Under the Plan, a participant may elect to withdraw voluntary, after-tax
contributions made to the Plan prior to January 1, 1987. Such withdrawals are
subject to a $1,000 minimum. In the event of extreme hardship and subject to
certain restrictions and limitations, a participant may withdraw their vested
interest in the portion of their account, subject to a $500 minimum,
attributable to matching, fixed, and discretionary contributions, and related
earnings. The Plan also allows for age 59 1/2 in-service withdrawals of all or
any portion of the participant's vested account balance.
Participants' Accounts
Each participant's account is credited with the participant's pretax and
voluntary contributions, the participant's allocable share of company
contributions, and related earnings of the funds. Participants' accounts may be
invested in 10% increments into any of the mutual funds available under the Plan
at the direction of the participant.
Loans
A participant may obtain a loan equal to the lesser of 50% of their vested
account balance or $50,000. The loan proceeds are deducted from the
participant's account and are repaid by means of payroll deductions. Loans are
required to be repaid within 60 months from the date on which the loan is
originally granted and may be prepaid early without penalty. The repayment
period for a loan that is obtained for purchasing a primary residence may be as
long as 360 months. The loan carries a reasonable interest rate as determined by
the Plan Sponsor. The interest rate is computed on the date the loan is
requested and remains fixed for the full term of the loan.
Plan Termination
Although it has not expressed any intention to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. Should the Plan be terminated,
participants will become fully vested in their accounts, and the assets of the
Plan would be distributed to the participants based on their individual account
balances as determined under the plan provisions.
L. B. Foster Company
401(k) and Profit Sharing Plan
Notes to Financial Statements
2. Summary of Significant Accounting Policies
Valuation of Investments
Mutual fund values are based on the underlying investments in securities. Mutual
fund securities traded on security exchanges are valued at the latest quoted
sales price. Securities traded on a national securities exchange are valued at
the last reported sales price on the last business day of the plan year. The
contract value of participation units owned in the collective trust fund is
based on quoted redemption values, as determined by the Trustee, on the last
business day of the plan year. The fair value of participation units owned by
the collective trust fund is determined based on the present value of the
underlying contracts' cash flows, discounted at current market rates for
investments of similar quality and duration. Loans receivable from participants
are valued at cost which approximates fair value.
Realized gain or loss includes recognized gains and losses on the sale of
investments. Unrealized appreciation or depreciation represents changes in value
from original cost. Dividend income is recorded on the ex-dividend date and
interest income is accrued as earned.
As described above, the assets of the Plan are concentrated in mutual funds
consisting primarily of stocks and bonds. Realization of amounts disclosed as
net assets available for benefits is dependent on the results of these markets.
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.
L. B. Foster Company
401(k) and Profit Sharing Plan
Notes to Financial Statements
2. Summary of Significant Accounting Policies (continued)
New Accounting Pronouncement
In September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157),
which establishes a framework for measuring fair value in accordance with
generally accepted accounting principles and expands disclosures about fair
value measurements. SFAS 157 is effective for fiscal years beginning after
November 15, 2007. The Plan is currently evaluating the impact that SFAS 157
will have on its financial statements.
3. Investments
Discretionary profit-sharing contributions are directed into eligible
participant accounts based on the participants' investment elections at the time
the contribution is made.
L. B. Foster Company
401(k) and Profit Sharing Plan
Notes to Financial Statements
3. Investments (continued)
For the year ended December 31, 2007, the Plan's investments (including
investments bought, sold, and held during the year) appreciated (depreciated) in
value as follows:
Net Realized/
Unrealized
Fair Market Appreciation
Value (Depreciation)
- -----------------------------------------------------------------------------
Fidelity Investments*:
Magellan Fund $ - $ 26,084
Equity Income Fund 2,249,883 (135,798)
Growth and Income Fund - (4,920)
Government Income Fund 1,261,473 32,214
Blue Chip Fund - (3,552)
Asset Manager Fund - 11,481
Balanced Fund 1,358,778 (21,232)
Low Price Stock Fund 1,635,135 (88,126)
Small Cap Stock Fund 1,070,718 (98,523)
Value Fund 102,810 (12,714)
International Discovery Fund 4,295,036 487,775
Cap Appreciation Fund 244,962 (15,723)
Spartan Extended Market Index Fund 38,529 (1,572)
Spartan International Index Fund 403,180 (6,360)
Spartan US Equity Index 3,365,131 110,149
Freedom Income Fund 199,433 (2,031)
Freedom 2000 880 291
Freedom 2010 1,168,992 8,563
Freedom 2020 2,106,979 22,400
Freedom 2030 1,416,285 1,642
Freedom 2040 515,485 7,684
Freedom 2005 58,509 (1,683)
Freedom 2015 344,652 (10,329)
Freedom 2025 514,989 (7,028)
Freedom 2035 26,526 242
Freedom 2045 96,027 (1,144)
Freedom 2050 124,771 (70)
Managed Income Portfolio 1,266,879 -
Retirement Government Money Market Fund 3,464,479 -
Mutual Shares 3,859,108 (144,632)
Davis NY Venture Fund 4,302,694 191,534
Columbia Acorn Select Z Fund 1,466,647 (16,270)
PIMCO Total Return Fund 1,672,612 41,641
Credit Suisse Emerging Growth Fund - 16,389
MSI International Equity Fund - 814
Allianz NFJ Small Cap Value Fund 1,138,086 (59,775)
L. B. Foster Company Stock Fund 8,175,923 4,922,608
-------------- ----------------
$ 47,945,591 $ 5,250,029
============== ================
L. B. Foster Company
401(k) and Profit Sharing Plan
Notes to Financial Statements
3. Investments (continued)
The fair value of investments representing 5% or more of the Plan's assets at
December 31, 2007 and 2006 is as follows:
2007 2006
------------------------------
Fidelity Investments:
Magellan Fund $ - $ 3,934,234
Equity Income Fund 2,249,883 2,658,469
Growth and Income Fund - 3,663,699
Low Price Stock Fund 1,635,135 2,192,096
International Discovery Fund 4,295,036 -
Retirement Government Money Market Fund 3,464,479 2,393,482
Spartan US Equity Index Fund 3,365,131 3,311,564
Mutual Shares 3,859,108 -
Davis NY Venture Fund 4,302,694 -
MSI International Equity Fund - 3,336,370
L. B. Foster Company Stock Fund 8,175,923 6,113,933
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
L. B. Foster Company
401(k) and Profit Sharing Plan
EIN #25-1324733 Plan #201
Schedule H, Line 4i - Schedule of Assets
(Held at End of Year)
December 31, 2007
Identity of Issue, Borrower, Shares Fair Market
Lessor, or Similar Party Description of Investment Held Value
- ------------------------------------------------------------------------------------------------------------------
Fidelity Investments*:
Equity Income Fund Equities 40,788 $ 2,249,883
Government Income Fund Government obligations 121,764 1,261,473
Balanced Fund Equities 69,290 1,358,778
Low Price Stock Fund Equities 39,755 1,635,135
Small Cap Stock Fund Equities 61,430 1,070,718
Value Fund Equities 1,371 102,810
International Discovery Fund Equities 99,699 4,295,036
Cap Appreciation Fund Equities 9,154 244,962
Spartan Extended Market Index Fund Index funds 1,005 38,529
Spartan International Index Fund Index funds 8,524 403,180
Spartan US Equity Index Equity funds, index funds 64,839 3,365,131
Freedom Income Fund Equity funds, fixed income funds 17,418 199,433
Freedom 2000 Equity funds, fixed income funds 71 880
Freedom 2010 Equity funds, fixed income funds 78,879 1,168,992
Freedom 2020 Equity funds, fixed income funds 133,269 2,106,979
Freedom 2030 Equity funds, fixed income funds 85,732 1,416,285
Freedom 2040 Equity funds, fixed income funds 52,979 515,485
Freedom 2005 Equity funds, fixed income funds 4,963 58,509
Freedom 2015 Equity funds, fixed income funds 27,639 344,652
Freedom 2025 Equity funds, fixed income funds 39,073 514,989
Freedom 2035 Equity funds, fixed income funds 1,939 26,526
Freedom 2045 Equity funds, fixed income funds 8,461 96,027
Freedom 2050 Equity funds, fixed income funds 10,916 124,771
Managed Income Portfolio Guaranteed investment contracts 1,280,647 1,266,879
Retirement Government Money Market Fund Government obligations, money 3,464,479 3,464,479
market securities
Mutal Shares Equities 153,444 3,859,108
Davis NY Venture Fund Equities 107,540 4,302,694
Columbia Acorn Select Z Fund Equities 51,624 1,466,647
PIMCO Total Return Fund Fixed income securities 156,465 1,672,612
Allianz NFJ Small Cap Value Fund Equities 38,449 1,138,086
--------------
Total mutual funds 39,769,668
L. B. Foster Company Stock Fund Common stock 158,050 8,175,923
--------------
8,175,923
Participant loans, interest rates
Outstanding participant loans ranging from 4.5% to 10.5%,
various maturities ranging
from 2 to 30 years 685,149
--------------
$ 48,630,740
==============
*Party in interest
EXHIBIT INDEX
Exhibit 23.1 Consent of Independent Registered Public Accounting Firm
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
L. B. Foster Company 401(k)
And Profit Sharing Plan
---------------------------
(Name of Plan)
Date: June 27, 2008 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 401(k) and Profit
Sharing Plan (formerly, the L.B. Foster Company Voluntary Investment Plan) of
our report dated June 27, 2008, with respect to the financial statements and
schedule of the L. B. Foster Company 401(k) and Profit Sharing Plan included in
this Annual Report (Form 11-K) for the year ended December 31, 2007.
/s/ Ernst & Young LLP
June 27, 2008