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 Voluntary Investment Plan
- --------------------------------------------------------------------------------
(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
- --------------------------------------------------------------------------------
(Name of issuer of the securities held pursuant to the Plan and the address of
principle executive office)
L. B. Foster Company
Voluntary Investment Plan
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
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, 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
Voluntary Investment Plan
Statements of Net Assets Available for Benefits
December 31
1999 1998
----------------------------------------
----------------------------------------
Assets
Investments at fair value $43,546,559 $36,326,350
Participant loans 423,366 421,853
----------------------------------------
43,969,925 36,748,203
Receivables:
Employee 85,862 70,156
Employer 419,493 506,054
----------------------------------------
505,355 576,210
----------------------------------------
Net assets available for benefits $44,475,280 $37,324,413
========================================
See accompanying notes.
L. B. Foster Company
Voluntary Investment Plan
Statements of Changes in Net Assets Available for Benefits
Year ended December 31
1999 1998
-------------------------------------
-------------------------------------
Additions:
Investment income:
Interest and dividends $ 2,719,477 $ 1,895,297
Net realized/unrealized
appreciation in investment
fair value 3,791,647 4,441,877
-------------------------------------
-------------------------------------
Total investment income 6,511,124 6,337,174
Contributions:
Employee 1,179,084 1,537,555
Employer 855,585 885,548
-------------------------------------
Total contributions 2,034,669 2,423,103
-------------------------------------
Total additions 8,545,793 8,760,277
Deductions:
Benefit payments 1,394,926 1,780,497
-------------------------------------
1,394,926 1,780,497
-------------------------------------
Increase in net assets available
for benefits 7,150,867 6,979,780
Net assets available for benefits,
beginning of year 37,324,413 30,344,633
-------------------------------------
Net assets available for benefits,
end of year $44,475,280 $37,324,413
=====================================
See accompanying notes.
L. B. Foster Company
Voluntary Investment Plan
Notes to Financial Statements
December 31, 1999
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 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 pretax contributions ranging from 2% to 10% of
annual compensation subject to Internal Revenue Code limitations. 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 provided, however, that the sum of the pretax and voluntary
employee contributions does not exceed 15% of the participant's annual
compensation. Participant contributions and employer matching contributions are
invested in accordance with participant elections.
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. The Company also 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.
1. Description of Plan (continued)
Contributions (continued)
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. Additional
matching employer contributions were not required in 1999 or 1998.
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 $380,000 and
$473,000 were approved for 1999 and 1998, respectively. The Company's
contributions may be reduced by any forfeitures which accumulate from
terminations of participants with nonvested employer contributions. Forfeitures
of $50,309 and $39,737 were utilized to reduce company contributions in 1999 and
1998, respectively. At December 31, 1999 and 1998, forfeitures of $77 and
$26,031, 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 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.
1. Description of Plan (continued)
Distributions (continued)
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. 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
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 his vested
interest in the portion of his 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 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 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 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.
1. Description of Plan (continued)
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 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.
2. Summary of Significant Accounting Policies (continued)
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.
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. All profit sharing contributions occurring after the effective
date will be directed into the L. B. Foster Company Common Stock Fund.
Participants may subsequently transfer profit sharing contributions into other
plan funds at their discretion. 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 $3,791,647 and
$4,441,877, respectively, as follows:
December 31
1999 1998
----------------------------------------------------------------------------
Net Net
Realized/ Realized/
Fair Unrealized Fair Unrealized
Market Appreciation Market Appreciation
Value (Depreciation) Value (Depreciation)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Fidelity Investments:
Magellan Fund* $11,302,774 $1,087,761 $ 7,536,801 $1,523,685
Equity Income Fund* 3,810,439 (38,849) 4,616,008 255,572
Growth and Income Fund* 7,922,424 311,912 9,471,078 1,532,588
Government Securities Fund* 2,289,684 (206,802) 2,998,061 47,710
Asset Manager Fund 1,660,696 107,791 1,960,344 (55,864)
Managed Income Fund 861,834 - 816,098 -
Retirement Government Money Market
Fund* 3,780,011 - 2,601,594 -
U.S. Equity Index Fund* 3,751,773 550,563 2,914,751 551,380
Janus Worldwide Fund* 6,619,620 1,852,291 2,720,037 548,728
Warburg Pincus Emerging Growth Fund
927,821 166,234 691,578 38,078
L. B. Foster Company Common Stock Fund
619,483 (39,254) - -
----------------------------------------------------------------------------
$43,546,559 $3,791,647 $36,326,350 $4,441,877
============================================================================
*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 September 18, 1995, 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 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
Voluntary Investment Plan
EIN: 25-1324733 Plan 201
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
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Fidelity Investments*:
Magellan Fund Equities 82,725 $11,302,774
Equity Income Fund Equities 71,250 3,810,439
Growth and Income Fund Equities 167,990 7,922,424
Government Securities Fund Government obligations 244,886 2,289,684
Asset Manager Fund Equities, money market, bonds 90,353 1,660,696
Managed Income Fund Guaranteed investment contracts 861,834 861,834
Retirement Government Money Market Fund Government obligations, money
market securities 3,780,011 3,780,011
U.S. Equity Index Fund Equities 72,024 3,751,773
Janus Worldwide Fund Equities 86,610 6,619,620
Warburg Pincus Emerging Growth Fund Equities 18,609 927,821
---------------
Total mutual funds 42,927,076
L. B. Foster Company Common Stock Fund
Common stock 127,073 619,483
---------------
43,546,559
Outstanding participant loans Participant loans, interest rates
ranging from 6.5% to 11%,
various maturities ranging
from 3 years to 30 years 423,366
---------------
---------------
$43,969,925
===============
*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
Voluntary Investment Plan
-------------------------
(Name of Plan)
June 22, 2000 By /s/ Roger F. Nejes
---------------------
(Roger F. Nejes,
Senior Vice President -
Finance and Administration
And Chief Financial Officer)
EXHIBIT INDEX
Exhibit Number Description
- --------------------------------------------------------------------------------
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 Voluntary Investment Plan included in this Form 11-K for the year
ended December 31, 1999.
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
Pittsburgh, Pennsylvania
June 22, 2000