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 21, 2001, 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, 2000.
/s/Ernst & Young LLP
Pittsburgh, Pennsylvania
June 26, 2001
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, 2000
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
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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)
Contents
Report of Independent Auditors .......................................3
Audited Financial Statements
Statements of Net Assets Available for Benefits.......................4
Statements of Changes in Net Assets Available for Benefits............5
Notes to Financial Statements ........................................6
Other Financial Information
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year).......13
Signatures............................................................14
Exhibit Index.........................................................15
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, 2000 and
1999, 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, 2000 and 1999, 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 at end of year as of December 31, 2000 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, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/Ernst & Young LLP
May 21, 2001
L. B. Foster Company
Voluntary Investment Plan
Statements of Net Assets Available for Benefits
December 31
2000 1999
-------------------------------------
Assets
Investments at fair value $38,458,799 $43,546,559
Participant loans 448,625 423,366
-------------------------------------
38,907,424 43,969,925
Receivables:
Employee 81,165 85,862
Employer 370,690 419,493
Other 490 -
-------------------------------------
452,345 505,355
-------------------------------------
Net assets available for benefits $39,359,769 $44,475,280
=====================================
See accompanying notes.
L. B. Foster Company
Voluntary Investment Plan
Statements of Changes in Net Assets Available for Benefits
Year ended December 31
2000 1999
-------------------------------------
Additions:
Investment (loss) income:
Interest and dividends $ 2,776,766 $ 2,719,477
Net realized/unrealized
(depreciation) appreciation
in investment fair value (5,521,254) 3,791,647
-------------------------------------
Total investment (loss) income (2,744,488) 6,511,124
Contributions:
Employee 1,491,975 1,179,084
Employer 896,501 855,585
-------------------------------------
Total contributions 2,388,476 2,034,669
-------------------------------------
(356,012) 8,545,793
Deductions:
Benefit payments 4,759,499 1,394,926
-------------------------------------
4,759,499 1,394,926
-------------------------------------
(Decrease) increase in net assets
available for benefits (5,115,511) 7,150,867
Net assets available for benefits,
beginning of year 44,475,280 37,324,413
-------------------------------------
Net assets available for benefits,
end of year $39,359,769 $44,475,280
=====================================
See accompanying notes.
L. B. Foster Company
Voluntary Investment Plan
Notes to Financial Statements
December 31, 2000
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 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.
Beginning the first of the month following twelve 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 twelve 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.
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 2000 or 1999.
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 $332,000 and
$380,000 were approved for 2000 and 1999, respectively. The Company's
contributions may be reduced by any forfeitures which accumulate from
terminations of participants with nonvested employer contributions. Forfeitures
of $40,169 and $50,309 were utilized to reduce company contributions in 2000 and
1999, respectively. At December 31, 2000 and 1999, forfeitures of $12,348 and
$77, 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. 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.
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. 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 accounting principles
generally accepted in the United States 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.
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 2000 and 1999, the Plan's investments (including investments bought,
sold, and held during the year) appreciated (depreciated) in value as follows:
December 31
2000 1999
----------------------------------------------------------------------------------
Net Net
Realized/ Realized/
Fair Unrealized Fair Unrealized
Market Appreciation Market Appreciation
Value (Depreciation) Value (Depreciation)
----------------------------------------------------------------------------------
Fidelity Investments:
Magellan Fund* $ 9,583,375 $(1,354,071) $11,302,774 $1,087,761
Equity Income Fund* 3,136,194 (48,516) 3,810,439 (38,849)
Growth and Income Fund* 6,047,373 (744,288) 7,922,424 311,912
Government Securities Fund* 1,993,344 104,280 2,289,684 (206,802)
Asset Manager Fund 1,311,620 (108,712) 1,660,696 107,791
Managed Income Fund 833,881 - 861,834 -
Retirement Government Money Market
Fund* 4,352,312 - 3,780,011 -
U.S. Equity Index Fund* 3,083,338 (342,342) 3,751,773 550,563
Janus Worldwide Fund* 6,037,891 (1,984,103) 6,619,620 1,852,291
Warburg Pincus Emerging Growth Fund
1,521,746 (621,735) 927,821 166,234
L. B. Foster Company Common Stock Fund
557,725 (421,767) 619,483 (39,254)
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$38,458,799 $(5,521,254) $43,546,559 $3,791,647
==================================================================================
*Investments with fair values representing 5% or more of the Plan's assets at
December 31, 2000 and 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.
L. B. Foster Company
Voluntary Investment Plan
EIN 25-1324733 Plan 201
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)
December 31, 2000
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 80,330 $ 9,583,375
Equity Income Fund Equities 58,697 3,136,194
Growth and Income Fund Equities 143,643 6,047,373
Government Securities Fund Government obligations 201,960 1,993,344
Asset Manager Fund Equities, money market, bonds 77,980 1,311,620
Managed Income Fund Guaranteed investment contracts 833,881 833,881
Retirement Government Money Market Fund Government obligations, money
market securities 4,352,312 4,352,312
U.S. Equity Index Fund Equities 65,869 3,083,338
Janus Worldwide Fund Equities 106,189 6,037,891
Warburg Pincus Emerging Growth Fund Equities 42,388 1,521,746
---------------
Total mutual funds 37,901,074
L. B. Foster Company Common Stock Fund Common stock 223,090 557,725
---------------
38,458,799
Outstanding participant loans Participant loans, interest rates
ranging from 6.5% to 11%,
various maturities ranging
from 1 year to 30 years 448,625
---------------
$38,907,424
===============
*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 26, 2001 By: /s/Lee B. Foster II
-----------------------------------
Lee B. Foster II
Chairman and Chief Executive Officer
EXHIBIT INDEX
Exhibit Number Description
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23 Consent of Independent Auditors