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Item 9A. Controls and Procedures

2023-03-10 compared with 2022-03-02 · 47 added, 51 removed, 166 unchanged (37% of the section changed)

9 unchanged sentences

Accordingly, even effective controls can provide only reasonable assurance with respect to financial statement preparation and presentation.

There were no significant changes in internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the fourth quarter of 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

There were no significant changes in internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred

during the fourth quarter of 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Foster Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022.

1 unchanged sentence

Based on this assessment, management concluded that the Company maintained effective internal control over financial reporting as of December 31, 2022.

The SEC’s general guidance permits the exclusion of an assessment of the effectiveness of a registrant’s internal control over financial reporting for an acquired business during the first year following such acquisition, if among other circumstances and factors, there is not adequate time between the acquisition date and the date of the assessment.

As previously discussed in Part II, Item 8, Financial Statements and Supplementary Data, Note 3 to the Consolidated Financial Statements, the Company completed the acquisition of Skratch Enterprises Ltd.

(“Skratch”) on June 21, 2022 and VanHooseCo Precast LLC (“VanHooseCo”) on August 12, 2022.

These acquired businesses constituted approximately 17.9% of the Company’s consolidated assets as of December 31, 2022 and 4.2% of the Company’s consolidated net sales for the year ended December 31, 2022.

Management’s assessment and conclusion on the effectiveness of the Company’s disclosure controls and procedures and internal control over financial reporting at December 31, 2022 excluded an assessment of the internal control over financial reporting of the assets and businesses acquired in the Skratch and VanHooseCo acquisitions.

Ernst & Young LLP, the independent registered public accounting firm that also audited the Company’s consolidated financial statements, has issued an attestation report on the Company’s internal control over financial reporting.

2 unchanged sentences

To the Stockholders and the Board of Directors of L.B.

Foster Company and Subsidiaries

Foster Company

Opinion on Internal Control Over Financial Reporting

3 unchanged sentences

Foster Company and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2021, and the related notes and the financial statement schedule listed in the index at Item 15(a) and our report dated March 2, 2022 expressed an unqualified opinion thereon.

As indicated in the accompanying Managements’ Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of VanHooseCo Precast LLC and Skratch Enterprises Ltd., which are included in the 2022 consolidated financial statements of the Company and constituted 17.9% of total assets as of December 31, 2022 and 4.2% of total net sales for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of VanHooseCo Precast LLC and Skratch Enterprises Ltd.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2022, and the related notes and the financial statement schedule listed in the Index at Item 15(a) and our report dated March 10, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

43 unchanged sentences

Consolidated Statements of Operations for the Years Ended December 31, 2022 and 2021.

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2021 and 2020.

Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2022 and 2021.

Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021.

9 unchanged sentences

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Balance at Beginning of Year Additions Charged to Costs and Expenses Deductions (1) Balance at End of Year

Deducted from assets to which they apply:

Allowance for credit losses $ 944 $ ( 87 ) $ 310 $ 547

Valuation allowance for deferred tax assets $ 1,483 $ 1,807 $ — $ 3,290

Deducted from assets to which they apply:

Balance at Beginning of Year Additions Charged to Costs and Expenses Other adjustments (1) Balance at End of Year

Allowance for credit losses

Valuation allowance for deferred tax assets $ 752 $ 731 $ — $ 1,483

For the year ended December 31,

2022 $ 547 $ 382 $ 116 $ 813

2021 $ 944 $ ( 87 ) $ 310 $ 547

Notes and accounts receivable written off as uncollectible or allowance reversed.

Balance at Beginning of Year Additions Charged to Costs and Expenses Other adjustments (1) Balance at End of Year

Valuation allowance for deferred tax assets

For the year ended December 31,

2022 $ 3,290 $ 37,895 $ 584 $ 40,601

2021 $ 1,483 $ 1,807 $ — $ 3,290

Consists primarily of adjustments related to unrealized income on interest rate swap contracts.

FORM 10-K SUMMARY

9 unchanged sentences

0-10436, filed on November 3, 2021.

2.2 Asset Purchase Agreement between VanHooseCo Precast, LLC and CXT Incorporated.

dated August 12, 2022, is incorporated herein by reference to Exhibit 2.1 to the Quarterly Report of Form 10-Q for the quarter ended September 30, 2022, File no.

0-10436, filed on November 8, 2022.

3.1 Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, File No.

4 unchanged sentences

Foster Company.

10.1 Third Amended and Restated Credit Agreement dated April 30, 2019, between Registrant and PNC Bank, N.A., Bank of America, N.A., Wells Fargo Bank, N.A., Citizens Bank, N.A., and BMO Harris Bank, N.A.

is incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K, File No.

0-10436, filed on May 2, 2019.

10.2 First Amendment dated June 26, 2020 to the Third Amended and Restated Credit Agreement dated April 30, 2019 between Registrant and PNC Bank, N.A., Bank of America, N.A., Wells Fargo Bank, National Association, Citizens Bank, N.A., and BMO Harris Bank, National Association is incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K, File No.

0-10436, filed on July 1, 2020.

10.1 Second Amendment dated January 29, 2021 to the Third Amended and Restated Credit Agreement dated April 30, 2019 between Registrant and PNC Bank, N.A., Bank of America, N.A., Wells Fargo Bank, National Association, Citizens Bank, N.A., and BMO Harris Bank, National Association is incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K, File No.

2 unchanged sentences

0-10436, filed on August 16, 2021.

10.3 Second Amendment dated August 12, 2022 to the Fourth Amended and Restated Credit Agreement dated August 13, 2021, between Registrant and PNC Bank, Citizens Bank, N.A., Wells Fargo Bank, National Association, Bank of America, N.A., and BMO Harris Bank, National Association is incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K/A, File No.

0-10436, filed on August 18, 2022.

10.4 ** 2006 Omnibus Incentive Plan, as amended and restated on May 25, 2016, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, File No.

26 unchanged sentences