For Immediate Release
Exhibit 99.01
SL INDUSTRIES, INC. ANNOUNCES FINANCIAL RESULTS
FOR ITS SECOND QUARTER ENDED JUNE 30, 2005
MT. LAUREL, NEW JERSEY, AUGUST 10, 2005 . . . SL INDUSTRIES, INC. (AMEX &
PHLX: SLI) announced today that net sales for the second quarter ended June 30,
2005 were $31,259,000, compared to $30,508,000 for the second quarter last year,
an increase of $751,000, or 2.5%. Net income from continuing operations was
$1,358,000, or $0.24 per diluted share, compared to net income from continuing
operations of $1,559,000, or $0.26 per diluted share, for the same period in
2004.
Net sales from continuing operations for the six months ended June 30, 2005
were $63,715,000, compared to net sales of $57,150,000 for the six months ended
June 30, 2004, an increase of $6,565,000, or 11.5%. Net income from continuing
operations for the six months ended June 30, 2005 was $3,327,000, or $0.58 per
diluted share, compared to net income from continuing operations of $2,244,000,
or $0.37 per diluted share, for the same period last year. Net income for the
six months ended June 30, 2005 was $3,026,000, or $0.53 per diluted share,
compared to net income of $4,720,000, or $0.79 per diluted share, for the same
period in 2004. Included in net income for 2004 was income from discontinued
operations of $2,516,000, net of tax, relating to the receipt of settlement fees
in connection with the Company's dismissed lawsuit with American Power
Conversion Corporation. The settlement fees were recorded in the first quarter
of 2004.
Results for the Company's four business segments were favorable over the
first six months of 2005. Condor D.C. Power Supplies, Inc. recorded net sales of
$22,384,000 and operating income of $2,428,000, as compared to net sales of
$19,523,000 and operating income of $1,400,000 for the same period in 2004. Teal
Electronics Corp. recorded net sales of $15,237,000 and operating income of
$2,135,000, as compared to net sales of $14,801,000 and operating income of
$2,428,000 for the same period last year. SL Montevideo Technologies, Inc.
recorded net sales of $13,680,000 and operating income of $1,824,000, as
compared to net sales of $11,783,000 and operating income of $1,259,000 for the
first six months of 2004. RFL Electronics Inc. recorded net sales of $12,414,000
and operating income of $1,316,000, as compared to net sales of $11,043,000 and
operating income of $836,000 for the same period last year.
Engineering and product development expenses for the first six months of
2005 increased by $193,000, or approximately 4%, as compared to the same period
last year. Increased research and development costs were recorded at each of the
Company's subsidiaries, except RFL which had incurred significant expenditures
in 2004 related to its development of several new products.
The Company reported net new orders of $32.4 million in the second quarter
of 2005, compared to net new orders of $32.0 million in the second quarter of
2004. Backlog at June 30, 2005 was $42.7 million, as compared to $44.1 million a
year earlier.
Commenting on the results, Warren Lichtenstein, Chairman and Chief
Executive Officer of SL Industries, Inc. said, "We achieved solid financial
results for the period in all of the Company's business segments. In the Power
Electronics Group, strong demand by medical equipment manufacturers drove
increased sales at Teal and Condor. Teal experienced lower profitability due to
higher prices for certain raw materials, resulting in lower income from
operations on slightly higher sales. We expect margin improvements at Teal over
the second half of the year, as it begins to realize cost savings from several
initiatives implemented in the second quarter.
"SL-MTI continues to perform well. Defense related aerospace bookings have
been increasing at a steady rate. Strong sales to new medical customers also
contributed to the six-month results. Bookings in the commercial aerospace
segment continue to be sluggish."
Lichtenstein continued, "RFL Electronics experienced increased demand for
each of its product lines, except teleprotection equipment, in the first
quarter. During the second quarter, the domestic market experienced weak
business activity. We believe this trend will reverse itself with the recent
enactment of the federal energy legislation, which should attract new investment
capital into RFL's domestic market. Additionally, in the second half of the year
RFL should benefit from industry acceptance of several new products that were
introduced in the first quarter. In the interim, RFL has taken steps to contain
its cost structure to be in line with current sales activity."
"Corporate and other expenses, which relate to corporate administration,
strategic management and oversight, capital financing, risk management,
corporate governance and controls, legal and litigation activities and public
reporting expenses were $2,876,000 for the six months ended June 30, 2005, as
compared to $2,440,000 for the same period in 2004. The increase of $436,000 is
primarily attributable to the salaries of the Company's chief operating officer
and tax manager, who were added to the corporate staff in mid-2004, and to
expenses related to stock-based compensation for certain senior executives."
Lichtenstein added, "On August 3, the Company entered into a new revolving
loan facility with Bank of America, which provides for borrowings of up to $25
million, and under certain circumstances up to $30 million, and continues for a
term of three years. The new loan agreement requires that the Company comply
with certain financial covenants, including a maximum ratio of total funded debt
to EBITDA, minimum levels of interest coverage and net worth and limitations on
capital expenditures, as defined therein. The terms of the new credit facility
will provide the Company with greater financial flexibility. More importantly,
we believe that Bank of America will be a valuable partner to the Company, as we
move forward to execute our multi-year strategic plan."
Lichtenstein concluded, "On May 25, the Company held its Annual
Shareholders Meeting, at which time shareholders re-elected all of the directors
standing for re-election by margins exceeding 96%. On behalf of the entire Board
of Directors, we thank our shareholders for their continued support."
ABOUT SL INDUSTRIES, INC.
SL Industries, Inc. designs, manufactures and markets power electronics,
power motion, power protection, teleprotection and communications equipment and
systems that is used in a variety of medical, aerospace, computer, datacom,
industrial, telecom, transportation and electric power utility applications. For
more information about SL Industries, Inc. and its products, please visit the
Company's web site at WWW.SLINDUSTRIES.COM.
FORWARD-LOOKING STATEMENTS
This press release contains statements that are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on current expectations, estimates and projections
about the Company's business based, in part, on assumptions made by management.
These statements are not guarantees of future performance and involve risks,
uncertainties and assumptions that are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is expressed or forecasted
in such forward-looking statements due to numerous factors, including those
described above and the following: the effectiveness of the cost reduction
initiatives undertaken by the Company, changes in demand for the Company's
products, product mix, the timing of customer orders and deliveries, the impact
of competitive products and pricing, constraints on supplies of critical
components, excess or shortage of production capacity, difficulties encountered
in the integration of acquired businesses and other risks discussed from time to
time in the Company's Securities and Exchange Commission filings and reports. In
addition, such statements could be affected by general industry and market
conditions and growth rates, and general domestic and international economic
conditions. Such forward-looking statements speak only as of the date on which
they are made, and the Company does not undertake any obligation to update any
forward-looking statement to reflect events or circumstances after the date of
this release.
(TABLE ATTACHED)
CONTACT:
David Nuzzo, Chief Financial Officer
E-mail: David.Nuzzo@slindustries.com
Phone: 856-727-1500, ext. 5515
Facsimile: 856-727-1683
SL INDUSTRIES, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2005 2004
---- ----
(Unaudited)
-----------
ASSETS
Current assets:
Cash and cash equivalents $ 4,308 $ 2,659
Marketable securities 639 --
Accounts and notes receivables, net 17,725 15,734
Inventories, net 15,349 15,839
Other current assets 3,984 3,758
------- -------
Total current assets 42,005 37,990
------- -------
Property, plant and equipment, net 8,421 8,509
Intangible assets, net 11,443 11,512
Other assets 4,455 5,073
------- -------
Total assets $66,324 $63,084
======= =======
Long term debt due within one year $ 1,688 $ 559
Other current liabilities 17,036 17,935
Long term debt, less portion due within one year -- 1,456
Other liabilities 5,304 5,447
Shareholders' equity 42,296 37,687
------- -------
Total liabilities and shareholders' equity $66,324 $63,084
======= =======
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
Three-Months Ended Six-Months Ended
June 30, June 30,
2005 2004 2005 2004
Net sales .......................................................... $ 31,259 $ 30,508 $ 63,715 $ 57,150
Cost and expenses:
Cost of products sold .......................................... 19,830 19,120 40,425 36,165
Engineering and product development ............................ 2,454 2,376 4,777 4,584
Selling, general and administrative ............................ 6,388 6,256 12,715 11,976
Depreciation and amortization .................................. 497 468 971 942
-------- -------- -------- --------
Total costs and expenses ........................................... 29,169 28,220 58,888 53,667
-------- -------- -------- --------
Income from operations ............................................. 2,090 2,288 4,827 3,483
Other income (expense):
Amortization of deferred financing costs ....................... (112) (112) (224) (224)
Interest income ................................................ 38 18 67 61
Interest expense ............................................... (61) (59) (149) (148)
-------- -------- -------- --------
Income from continuing operations before income taxes .............. 1,955 2,135 4,521 3,172
Income tax provision ............................................... 597 576 1,194 928
-------- -------- -------- --------
Income from continuing operations .................................. 1,358 1,559 3,327 2,244
Income (loss) from discontinued operations (net of tax) ............ (231) 20 (301) 2,476
-------- -------- -------- --------
Net income ......................................................... $ 1,127 $ 1,579 $ 3,026 $ 4,720
======== ======== ======== ========
BASIC NET INCOME (LOSS) PER COMMON SHARE ........................... *
Income from continuing operations .............................. $ 0.25 $ 0.27 $ 0.60 $ 0.38
Income (loss) from discontinued operations (net of tax) ........ (0.04) 0.00 (0.05) 0.42
-------- -------- -------- --------
Net income ..................................................... $ 0.20 $ 0.27 $ 0.55 $ 0.80
======== ======== ======== ========
DILUTED NET INCOME (LOSS) PER COMMON SHARE ......................... *
Income from continuing operations .............................. $ 0.24 $ 0.26 $ 0.58 $ 0.37
Income (loss) from discontinued operations (net of tax) ........ (0.04) 0.00 (0.05) 0.41
-------- -------- -------- --------
Net income ..................................................... $ 0.20 $ 0.26 $ 0.53 $ 0.79
======== ======== ======== ========
Shares used in computing basic net income (loss)
per common share ................................................. 5,533 5,880 5,503 5,909
Shares used in computing diluted net income (loss)
per common share ................................................. 5,763 5,984 5,699 6,007
* EARNINGS PER SHARE DOES NOT ADD DUE TO ROUNDING.
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(unaudited)
Three-Months Ended Six-Months Ended
June 30, June 30,
2005 2004 2005 2004
------ ------ ------ ------
Net income ..................................................... $1,127 $1,579 $3,026 $4,720
Other comprehensive income (net of tax):
Unrealized gain on securities .......................... 34 -- 47 --
------ ------ ------ ------
Comprehensive income ........................................... $1,161 $1,579 $3,073 $4,720
====== ====== ====== ======
