Exhibit 99.1
SL INDUSTRIES, INC. ANNOUNCES FINANCIAL RESULTS
FOR ITS SECOND QUARTER ENDED JUNE 30, 2006
MT. LAUREL, NEW JERSEY, AUGUST 8, 2006 . . . SL INDUSTRIES, INC. (AMEX
& PHLX: SLI) announced today that net sales for the second quarter ended June
30, 2006 were $43,114,000, compared to $31,259,000 for the second quarter last
year, an increase of $11,855,000, or 38%. Net income from continuing operations
was $2,107,000, or $0.36 per diluted share, compared to net income from
continuing operations of $1,358,000, or $0.24 per diluted share, for the same
period in 2005. Second quarter results include the financial performance of Ault
Incorporated ("Ault"), which was acquired on January 26, 2006. Net sales of Ault
for the second quarter were $12,324,000, with income from operations of
$1,606,000.
Net sales from continuing operations for the six months ended June 30,
2006 were $82,399,000, compared to net sales of $63,715,000 for the six months
ended June 30, 2005, an increase of $18,684,000, or 29%. Net income from
continuing operations for the six months ended June 30, 2006 was $3,340,000, or
$0.58 per diluted share, compared to net income from continuing operations of
$3,327,000, or $0.58 per diluted share, for the same period last year. Net sales
of Ault for the six month period ended June 30, 2006 were $20,929,000, with
income from operations of $1,983,000.
Loss from discontinued operations was $297,000 for the first six months
of 2006, compared to a loss from discontinued operations of $301,000 for the
same period last year. As a result, for the six-month period ended June 30,
2006, the Company recorded net income of $3,043,000, or $0.52 per diluted share,
compared to net income of $3,026,000, or $0.53 per diluted share, for the same
period last year.
Results for the Company's four business segments were mixed over the
first six months of 2006. SL Power Electronics Corp. (which was created through
the consolidation of Condor D.C. Power Supplies, Inc. and Ault) recorded net
sales of $41,162,000 and operating income of $3,343,000, as compared to net
sales of $22,384,000 and operating income of $2,428,000 for the same period in
2005. The results of SL Power Electronics Corp. includes the results of Ault
from the acquisition date of January 26, 2006. Teal Electronics Corp. recorded
net sales of $17,792,000 and operating income of $2,835,000, as compared to net
sales of $15,237,000 and operating income of $2,135,000 for the same period last
year. SL Montevideo Technology, Inc. recorded net sales of $12,688,000 and
operating income of $501,000, as compared to net sales of $13,680,000 and
operating income of $1,824,000 for the first six months of 2005. RFL Electronics
Inc. recorded net sales of $10,757,000 and operating income of $710,000, as
compared to net sales of $12,414,000 and operating income of $1,316,000 for the
same period last year.
Engineering and product development expenses for the first six months
of 2006 increased by $1,453,000, or approximately 30%, as compared to the same
period last year. The acquisition of Ault accounted for $1,300,000 of the
increased engineering expenses. SL-MTI also recorded an increase of $217,000, or
19%, attributable to increased ongoing development jobs and decreased customer
funded programs.
The Company reported net new orders of $49.2 million in the second
quarter of 2006, compared to net new orders of $32.4 million in the second
quarter of 2005. Backlog at June 30, 2006 was $58.0 million, as compared to
$42.7 million a year earlier.
Commenting on the results, James Taylor, President and Chief Executive
Officer of SL Industries, said, "In general, the Company's business segments
rebounded nicely after a difficult first quarter. Increased sales at the
Company's Power Electronics Group, comprised of SL Power Electronics Corp. and
Teal Electronics Corp., were driven by strong demand from semiconductor and
medical equipment manufacturers. Margins at SL Power Electronics Corp. declined
as a result of the acquisition of Ault and are expected to steadily improve as
the business is fully consolidated."
Taylor added, "This quarter we introduced the SL Power Electronics
Corp., which was formed by the consolidation of Condor D.C. Power Supplies, Inc.
and Ault Incorporated. This new power electronics company operates out of seven
locations in four countries. It has been very well received by our customers,
who increasingly require global sourcing capabilities. With its global
infrastructure established, SL Power Electronics Corp. intends to further
penetrate international markets, with plans underway to expand its presence in
the People's Republic of China and to open a new sales office in Germany in the
third quarter."
"The one exception to the Company's quarter-to-quarter improvement was
attributable to the performance of SL Montevideo Technology, Inc., the Company's
motion controls division. The continued deferral of defense-related aerospace
orders decreased sales volume and caused manufacturing inefficiencies at SL-MTI.
Although the number of programs under development in both the defense and
commercial aerospace markets are increasing, lower order volumes required that
the division lay-off 82 employees in the second quarter. The layoffs entailed
separation payments of $182,000 during the period. We expect sales to increase
slowly for the remainder of the year and are taking action to further improve
operations."
"RFL Electronics' net sales improved in the second quarter, but have
been affected by weak bookings for its carrier communications product line. In
addition, a number of anticipated utility system upgrades have been postponed in
North America. We expect improved results at RFL for the second half, as a
result of the growing market acceptance of several new products and the
increasing need for capital investment in the nation's electric utility
transmission infrastructure."
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Taylor continued, "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 $2,356,000 for the six-month
period ended June 30, 2006, as compared to $2,876,000 for the same period in
2005. Corporate expenses decreased to 3% of net sales for the six months ended
June 30, 2005, as compared to 5% of net sales for the same period last year."
Taylor concluded, "On May 17, the Company held its Annual Shareholders
Meeting, at which time shareholders re-elected all of the directors standing for
re-election by margins exceeding 90%. 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
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SL INDUSTRIES, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2006 2005
---- ----
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ -- $ 9,985
Receivables, net 24,144 16,436
Inventories, net 21,474 14,570
Other current assets 5,778 3,203
------- -------
Total current assets 51,396 44,194
------- -------
Property, plant and equipment, net 11,650 8,754
Intangible assets, net 17,019 11,388
Other assets 8,620 5,978
------- -------
Total assets $88,685 $70,314
======= =======
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Long term debt due within one year $ -- $ --
Other current liabilities 27,465 18,387
------- -------
Total current liabilities 27,465 18,387
------- -------
Long term debt, less portion due within one year 6,822 --
Other liabilities 4,359 5,282
Shareholders' equity 50,039 46,645
------- -------
Total liabilities and shareholders' equity $88,685 $70,314
======= =======
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
---------- ---------- ---------- -----------
Net sales .......................................................... $ 43,114 $ 31,259 $ 82,399 $ 63,715
Cost and expenses:
Cost of products sold .......................................... 29,003 19,830 55,137 40,425
Engineering and product development ............................ 3,151 2,454 6,230 4,777
Selling, general and administrative ............................ 7,262 6,388 14,818 12,715
Depreciation and amortization .................................. 590 497 1,181 971
-------- -------- -------- --------
Total costs and expenses ........................................... 40,006 29,169 77,366 58,888
-------- -------- -------- --------
Income from operations ............................................. 3,108 2,090 5,033 4,827
Other income (expense):
Amortization of deferred financing costs ....................... (22) (112) (44) (224)
Interest income ................................................ 1 38 29 67
Interest expense ............................................... (170) (61) (299) (149)
-------- -------- -------- --------
Income from continuing operations before income taxes .............. 2,917 1,955 4,719 4,521
Income tax provision ............................................... 810 597 1,379 1,194
-------- -------- -------- --------
Income from continuing operations .................................. 2,107 1,358 3,340 3,327
(Loss) from discontinued operations (net of tax) ................... (185) (231) (297) (301)
-------- -------- -------- --------
Net income ......................................................... $ 1,922 $ 1,127 $ 3,043 $ 3,026
======== ======== ======== ========
BASIC NET INCOME (LOSS) PER COMMON SHARE ........................... *
Income from continuing operations .............................. $ 0.37 $ 0.25 $ 0.59 $ 0.60
(Loss) from discontinued operations (net of tax) ............... (0.03) (0.04) (0.05) (0.05)
-------- -------- -------- --------
Net income ..................................................... $ 0.34 $ 0.20 $ 0.54 $ 0.55
======== ======== ======== ========
DILUTED NET INCOME (LOSS) PER COMMON SHARE ......................... *
Income from continuing operations .............................. $ 0.36 $ 0.24 $ 0.58 $ 0.58
(Loss) from discontinued operations (net of tax) ............... (0.03) (0.04) (0.05) (0.05)
-------- -------- -------- --------
Net income ..................................................... $ 0.33 $ 0.20 $ 0.52 $ 0.53
======== ======== ======== ========
Shares used in computing basic net income (loss)
per common share ............................................... 5,631 5,533 5,620 5,503
Shares used in computing diluted net income (loss)
per common share ............................................... 5,824 5,763 5,807 5,699
SL INDUSTRIES, INC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
---------- ---------- ---------- -----------
Net income ................................................ $ 1,922 $ 1,127 $ 3,043 $ 3,026
Other comprehensive income (net of tax):
Foreign currency translation .......................... 22 -- 28 --
Investments available for sale ........................ -- 34 (67) 47
-------- -------- -------- --------
Comprehensive income ...................................... $ 1,944 $ 1,161 $ 3,004 $ 3,073
======== ======== ======== ========
* Earnings per share does not total due to rounding.
