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, 2008.
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 Savings Plan for Bargaining Unit Employees
--------------------------------------------------------------------------------
(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 Savings Plan for
Bargaining Unit Employees
December 31, 2008 and 2007, and the
Year Ended December 31, 2008
With Report of Independent Registered Public Accounting
Firm
L.B. Foster Company
Savings Plan for Bargaining Unit Employees
Financial Statements
and Other Financial Information
December 31, 2008 and 2007,
and the Year Ended December 31, 2008
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
Savings Plan for Bargaining Unit Employees
We have audited the accompanying statements of net assets available for benefits
of the L. B. Foster Company Savings Plan for Bargaining Unit Employees as of
December 31, 2008 and 2007, and the related statement of changes in net assets
available for benefits for the year ended December 31, 2008. 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, 2008 and 2007, and the changes in its net assets available for
benefits for the year ended December 31, 2008, 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, 2008 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
Pittsburgh, Pennsylvania
June 25, 2009
L.B. Foster Company
Savings Plan for Bargaining Unit Employees
Statements of Net Assets Available for Benefits
December 31
2008 2007
----------- -----------
Assets
Investments, at fair value $ 981,415 $ 1,586,900
Participant loans 59,401 49,333
----------- -----------
Net assets available for benefits, at fair value 1,040,816 1,636,233
Adjustment from fair value to contract value
for investments in fully benefit-responsive
investment contracts 4,543 883
----------- -----------
Net assets available for benefits $ 1,045,359 $ 1,637,116
=========== ===========
See accompanying notes.
L.B. Foster Company
Savings Plan for Bargaining Unit Employees
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2008
Investment income (loss):
Interest and dividends $ 47,606
Net realized/unrealized depreciation in investment fair value (510,114)
------------
Total investment loss (462,508)
Contributions:
Employee 83,697
Employer 32,808
------------
Total contributions 116,505
------------
(346,003)
Deductions from net assets attributable to:
Benefit payments 244,516
Administrative expenses 1,238
------------
245,754
------------
Decrease in net assets available for benefits (591,757)
Net assets available for benefits, beginning of year 1,637,116
------------
Net assets available for benefits, end of year $ 1,045,359
============
See accompanying notes.
L.B. Foster Company
Savings Plan for Bargaining Unit Employees
Notes to Financial Statements
December 31, 2008 and 2007
1. Description of Plan
The following brief description of the L.B. Foster Company Savings Plan for
Bargaining Unit Employees (the Plan) is provided for general information
purposes only. Participants should refer to the summary plan description as
amended on May 1, 2007, for more complete information.
General
The Plan is a defined contribution plan extended to union hourly employees of
L.B. Foster Company (Company) who have attained age 18 and are employed at
locations specified by the Plan. The L.B. Foster Company Employee Benefits
Policy and Review Committee, appointed by the Board of Directors of the Company,
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 up to 75% 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
after-tax basis provided, however, that the sum of the deferred savings and
voluntary employee contributions does not exceed 100% of the participant's
annual compensation. Participant and Company contributions are invested in
accordance with participant elections.
Company contributions are made pursuant to the terms of the collective
bargaining agreements applicable to the Company's specific locations. Eligible
employees of Spokane, Washington, shall have a Company matching contribution of
$.50 for every $1.00 contributed by the employee on the first 4% to 6% of annual
compensation, based upon years of service, as defined by the Plan. Eligible
employees of the Bedford, Pennsylvania, facility shall have a Company matching
contribution of $.50 for every $1.00 contributed by the employee, up to the
first 5% of the employee's compensation. Matching contributions will only be
made if the employee contributes to the Plan. The Company's contributions may be
reduced by any forfeitures which accumulate. During the year ended December 31,
2008, the Company utilized forfeitures approximating $1,070 to offset Company
contributions. At December 31, 2008 and 2007, forfeitures approximating $680 and
$1,750, 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 three 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 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 distribution occurs and that the
participant has completed 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. 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 their vested interest
in the portion of their account attributable to deferred savings contributions
and related earnings. The Plan also allows for age 591/2 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.
1. Description of Plan (continued)
Loans
A participant may obtain a loan from the vested portion of their account. 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 120 months. The loan carries an interest rate
computed at the prime rate plus 1/2%. 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. 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.
2. Summary of Significant Accounting Policies (continued)
As described above, the investments 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.
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 U.S.
generally accepted accounting principles and expands disclosures about fair
value measurements. On January 1, 2008, the Plan adopted SFAS 157. Adoption did
not impact the net assets available for benefits but resulted in additional
disclosures (Note 7).
Basis of Accounting
The financial statements of the Plan are maintained on the accrual basis.
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
For the year ended December 31, 2008, the Plan's investments (including
investments bought, sold, and held during the year) appreciated (depreciated) in
value as follows:
2008
------------------------------
Net Realized/
Unrealized
Fair Market Appreciation
Value (Depreciation)
------------------------------
Fidelity investments:
Magellan Fund $ - $ (156,588)
Mutual Shares Class A 146,259 (41,583)
Davis NY Venture Fund 212,356 (74,952)
Balanced Fund 88,112 (16,613)
Growth and Income Fund - (87,093)
Government Income Fund 156,537 8,360
Asset Manager Fund - (20,920)
Managed Income Portfolio 84,221 -
Retirement Government Money Market Fund 86,894 -
Spartan U.S. Equity Index Fund 162,974 (103,837)
Freedom Income Fund 5,510 (923)
Freedom 2000 1,001 (221)
Freedom 2005 659 (171)
Freedom 2010 - (129)
Freedom 2015 53 (16)
Freedom 2020 3,648 (1,638)
Freedom 2030 261 (3,403)
Freedom 2035 15,854 669
Freedom 2040 17,076 (11,056)
------------------------------
$ 981,415 $ (510,114)
==============================
3. Investments
The fair value of investments representing 5% or more of the Plan's net assets
at December 31, 2008 and 2007 follows:
2008 2007
------------------------------
Fidelity investments:
Magellan Fund $ - $ 494,804
Growth and Income Fund - 286,645
Government Income Fund 156,537 150,782
Asset Manager Fund - 143,252
Retirement Government Money Market Fund 86,894 114,041
Spartan U.S. Equity Index Fund 162,974 262,308
Balanced Fund 88,112 -
Managed Income Portfolio 84,221 81,281
Mutual Shares Class A 146,259 -
Davis NY Venture Fund 212,356 -
4. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
(IRS) dated April 29, 2002, 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, as amended, 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.
6. Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are
exposed to various risks such as interest rate, market, and credit risks. Due to
the level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect
participants' account balances and the amounts reported in the Statements of Net
Assets Available for Benefits.
7. Fair Value Measurements
Effective January 1, 2008, the Plan adopted the provisions of SFAS 157 for its
financial assets carried in the financial statements at fair value on a
recurring basis. SFAS 157 defines fair value as the exchange price that would be
received for an asset in an orderly transaction between market participants at
the measurement date. SFAS 157 also establishes a fair value hierarchy and
requires categorization of assets measured at fair value into one of three
levels based on the inputs used in the valuation. Assets are classified in their
entirety based on the lowest level of input significant to the fair value
measurement. The three levels are defined as:
Level 1 - Observable inputs based on quoted prices (unadjusted) in active
markets for identical assets.
Level 2 - Observable inputs, other than those included in Level 1, based on
quoted prices for similar assets in active markets or quoted prices for
identical assets in inactive markets.
Level 3 - Unobservable inputs that reflect an entity's own assumptions
about the inputs a market participant would use in pricing the asset based on
the best information available in the circumstances.
Investments included in the statements of net assets available for benefits in
mutual funds totaling $897,194 are stated at fair value as of December 31, 2008.
These investments are based upon daily unadjusted quoted prices and, therefore,
are considered Level 1.
Investments included in the statements of net assets available for benefits in
common/collective trusts totaling $84,221 are stated at fair value as of
December 31, 2008. These investments are based on good-faith estimates provided
by the counterparty based on valuation models and, therefore, are considered
Level 2.
7. Fair Value Measurements (continued)
Participant loans are valued at amortized cost, which approximates fair value,
and are considered Level 3, and a summary of changes in the fair value for the
year ended December 31, 2008 follows:
Balance, beginning of year $ 49,333
Issuances 42,349
Repayments and distributions (32,281)
-----------
Balance, end of year $ 59,401
===========
8. Reconciliation between Financial Statements and Form 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500 at December 31, 2008 and 2007:
2008 2007
------------ ------------
Net assets available for benefits per the financial statements $ 1,045,359 $ 1,637,116
Adjustment to report collective trust fund at fair value (4,543) (883)
------------ ------------
Net assets available for benefits per the Form 5500 $ 1,040,816 $ 1,636,233
============ ============
The following is a reconciliation of net realized/unrealized appreciation in
investment fair value per the financial statements to the Form 5500 for the year
ended December 31, 2008:
Net realized/unrealized depreciation per the financial statements $ (510,114)
Adjustment to report collective trust fund at fair value (3,660)
------------
Net realized/unrealized depreciation per the Form 5500 $ (513,774)
============
Other Financial Information
L.B. Foster Company
Savings Plan for Bargaining Unit Employees
Schedule H, Line 4i - Schedule of Assets
(Held at End of Year)
EIN #25-1324733 Plan #014
December 31, 2008
Fair
Identity of Issue, Borrower, Shares Market
Lessor, or Similar Party Description of Investment Held Value
---------------------------------------------------------------------------------------------------
Fidelity investments*:
Government Income Fund Government obligations 14,296 $ 156,537
Balanced Fund Equities 6,716 88,112
Managed Income Portfolio Guaranteed investment contracts 88,764 84,221
Retirement Government Money Government obligations, money
Market Fund market securities 86,894 86,894
Spartan U.S. Equity Index Fund Equities 5,109 162,974
Freedom Income Fund Equity funds, fixed income funds 576 5,510
Freedom 2000 Equity funds, fixed income funds 100 1,001
Freedom 2005 Equity funds, fixed income funds 79 659
Freedom 2015 Equity funds, fixed income funds 6 53
Freedom 2020 Equity funds, fixed income funds 363 3,648
Freedom 2030 Equity funds, fixed income funds 27 261
Freedom 2035 Equity funds, fixed income funds 1,974 15,854
Freedom 2040 Equity funds, fixed income funds 3,055 17,076
Mutual Shares Class A Equities 9,640 146,259
Davis NY Venture Fund Equities 8,991 212,356
----------
Total mutual funds 981,415
Outstanding participant loans* Participant loans, interest rates
ranging from 4.5% to 9.5%,
various maturities ranging from
one year to ten years 59,401
----------
$1,040,816
==========
*Party in interest
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 Savings
Plan for Bargaining
Unit Employees
-----------------------------
(Name of Plan)
Date: June 26, 2009 By: /s/ David L. Voltz
------------------- -----------------------------
David L. Voltz
Vice President,
General Counsel and
Secretary
EXHIBIT INDEX
Exhibit 23.1 Consent of Independent Registered Public Accounting Firm
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. 333-159470) pertaining to the L. B. Foster Company Savings Plan for
Bargaining Unit Employees of our report dated June 25, 2009, with respect to the
financial statements and schedule of the L. B. Foster Company Savings Plan for
Bargaining Unit Employees included in this Annual Report (Form 11-K) for the
year ended December 31, 2008.
/s/ Ernst & Young LLP
Pittsburgh, Pennsylvania
June 25, 2009