Exhibit 99.1
For Immediate Release
SL INDUSTRIES, INC. ANNOUNCES FINANCIAL RESULTS FOR
ITS THIRD QUARTER ENDED SEPTEMBER 30, 2006
MT. LAUREL, NEW JERSEY, NOVEMBER 8, 2006 . . . SL INDUSTRIES, INC.
(AMEX & PHLX: SLI) announced today that net sales for the third quarter ended
September 30, 2006 was $45,165,000, compared to $32,098,000 for the third
quarter last year, an increase of $13,067,000, or 41%. Net income from
continuing operations was $1,806,000, or $0.31 per diluted share, compared to
net income from continuing operations of $2,552,000, or $0.44 per diluted share,
for the same period in 2005. Third quarter results for 2006 include the
financial performance of Ault Incorporated ("Ault"), which was acquired on
January 26, 2006. Ault's results prior to its acquisition are not included in
any of the Company's results. Net sales of Ault for the third quarter were
$13,743,000, with income from operations of $1,624,000.
Net sales from continuing operations for the nine months ended
September 30, 2006 were $127,564,000, compared to net sales of $95,813,000 for
the nine months ended September 30, 2005, an increase of $31,751,000, or 33%.
Net income from continuing operations for the nine months ended September 30,
2006 was $5,146,000, or $0.88 per diluted share, compared to net income from
continuing operations of $5,879,000, or $1.03 per diluted share, for the same
period last year. Results for the nine months ended September 30, 2006 include
the financial performance of Ault since January 26, 2006. Net sales of Ault for
the nine month period ended September 30, 2006 were $34,672,000, with income
from operations of $3,071,000.
The Company's four business segments encountered differing economic
conditions in their respective served markets and reported corresponding mixed
results, compared to the first nine months of the prior year. SL Power
Electronics Corp. (which was created through the consolidation of Condor D.C.
Power Supplies, Inc. and Ault) recorded net sales of $65,065,000 and operating
income of $5,631,000, as compared to net sales of $33,001,000 and operating
income of $3,260,000 for the same period in 2005. The results of SL Power
Electronics Corp. include the results of Ault from the acquisition date of
January 26, 2006. Teal Electronics Corp. recorded net sales of $26,976,000 and
operating income of $4,100,000, as compared to net sales of $24,077,000 and
operating income of $3,725,000 for the same period last year. SL Montevideo
Technology, Inc. recorded net sales of $18,825,000 and operating income of
$818,000, as compared to net sales of $21,120,000 and operating income of
$2,941,000 for the first nine months of 2005. And RFL Electronics Inc. recorded
net sales of $16,698,000 and operating income of $1,417,000, as compared to net
sales of $17,615,000 and operating income of $1,862,000 for the same period last
year.
Engineering and product development expenses for the first nine months
of 2006 increased by $2,076,000, or approximately 29%, as compared to the same
period last year. The acquisition of Ault accounted for $2,015,000 of the
increased engineering expenses. Other than RFL Electronics, all of the Company's
business segments increased or maintained their engineering and product
development expenditures in 2006. RFL Electronics decreased product development
expenses $102,000, or 7%, as it incurred significant costs in 2005 related to
the development of several new product designs and applications.
The Company reported net new orders of $41.5 million in the third
quarter of 2006, compared to net new orders of $29.7 million in the third
quarter of 2005. Net new orders for the nine-month period ended September 30,
2006 increased $38.2 million from the same period last year. Backlog at
September 30, 2006 was $53.8 million, as compared to $40.0 million a year
earlier.
Commenting on the results, James Taylor, Chief Executive Officer and
President of SL Industries, Inc. said, "For the most part, the Company's
business segments showed steady progress in executing their strategic
objectives, after starting the year under a challenging business environment.
Increased sales at the Power Electronics Group, comprised of SL Power
Electronics Corp. and Teal Electronics Corp., were driven by strong demand from
semiconductor and medical equipment manufacturers, as well as increased business
activity from electronics distributors. While the successful integration of Ault
improved its financial performance in the third quarter, gross margins for the
Group declined over the period as a result of increased raw materials prices. We
have been working with our customers and suppliers to address this concern."
Taylor continued, "The Company's results have been strongly impacted by
the difficulties of SL Montevideo Technology, its motion controls division. The
sharp decline in orders for certain military/aerospace products had a
disproportionate effect on results of operations, as these programs typically
involve high-volume production runs. The rapid shift in SL-MTI's business to
low-volume, high-mix production runs caused significant manufacturing
inefficiencies at its plants. In addition, SL-MTI incurred down-sizing expenses
of approximately $370,000 over the past two quarters. Given the new complexion
of SL-MTI's business, we are now working to reduce overhead and transform its
operations to efficiently manufacture a more diverse product mix."
"RFL Electronics recorded operating income in the third quarter that
basically equaled its results for the entire first half of the year. Increased
international sales and growing market recognition of its new line of
teleprotection products drove RFL's strong performance. We expect continued
improvement at RFL Electronics, although we have not yet seen the large scale
capital investment anticipated to upgrade the nation's electric utility
infrastructure."
2
Taylor added, "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 $4,150,000 for the nine months ended
September 30, 2006, as compared to $3,619,000 for the same period in 2005.
Expenses attributable to a deferred executive compensation plan amounted to
$390,000 for the period, versus $12,000 for the first nine months of last year.
The value of the plan is based on the market price of the Company's common
stock, which appreciated rapidly at the end of the third quarter."
Taylor concluded, "On November 1, SL Industries announced the
acquisition of MTE Corporation, a leading provider of electromagnetic products
used to condition power for industrial and commercial facilities. The addition
of MTE will allow the Power Electronics Group to address an attractive and
growing niche and take advantage of operational synergies. We believe this
acquisition will advance the Company's strategy to penetrate new markets for
profitable growth. We look forward to working with MTE's dedicated employees to
expand our customer base and increase our shareholder value."
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.
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)
September 30, December 31,
2006 2005
---- ----
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ -- $ 9,985
Receivables, net 28,840 16,436
Inventories, net 22,238 14,570
Other current assets 6,100 3,203
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Total current assets 57,178 44,194
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Property, plant and equipment, net 12,572 8,754
Intangible assets, net 17,160 11,388
Other assets 7,726 5,978
------- -------
Total assets $94,636 $70,314
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LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Long term debt due within one year $ -- $ --
Other current liabilities 28,981 18,387
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Total current liabilities 28,981 18,387
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Long term debt, less portion due within one year 9,453 --
Other liabilities 4,322 5,282
Shareholders' equity 51,880 46,645
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Total liabilities and shareholders' equity $94,636 $70,314
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SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
---- ---- ---- ----
Net sales $ 45,165 $ 32,098 $ 127,564 $ 95,813
Cost and expenses:
Cost of products sold 30,809 20,931 85,946 61,356
Engineering and product development 2,917 2,294 9,147 7,071
Selling, general and administrative 8,034 5,050 22,852 17,765
Depreciation and amortization 623 481 1,803 1,452
--------- --------- --------- ---------
Total costs and expenses 42,383 28,756 119,748 87,644
--------- --------- --------- ---------
Income from operations 2,782 3,342 7,816 8,169
Other income (expense):
Amortization of deferred financing costs (22) (236) (66) (460)
Interest income 2 61 30 128
Interest expense (153) (236) (452) (385)
--------- --------- --------- ---------
Income from continuing operations before income taxes 2,609 2,931 7,328 7,452
Income tax provision 803 379 2,182 1,573
--------- --------- --------- ---------
Income from continuing operations 1,806 2,552 5,146 5,879
(Loss) from discontinued operations (net of tax) (148) (98) (445) (398)
--------- --------- --------- ---------
Net income $ 1,658 $ 2,454 $ 4,701 $ 5,481
========= ========= ========= =========
BASIC NET INCOME (LOSS) PER COMMON SHARE *
Income from continuing operations $ 0.32 $ 0.46 $ 0.91 $ 1.06
(Loss) from discontinued operations (net of tax) (0.03) (0.02) (0.08) (0.07)
--------- --------- --------- ---------
Net income $ 0.29 $ 0.44 $ 0.84 $ 0.99
========= ========= ========= =========
DILUTED NET INCOME (LOSS) PER COMMON SHARE *
Income from continuing operations $ 0.31 $ 0.44 $ 0.88 $ 1.03
(Loss) from discontinued operations (net of tax) (0.03) (0.02) (0.08) (0.07)
--------- --------- --------- ---------
Net income $ 0.28 $ 0.42 $ 0.81 $ 0.96
========= ========= ========= =========
Shares used in computing basic net income (loss)
per common share 5,644 5,580 5,628 5,528
Shares used in computing diluted net income (loss)
per common share 5,840 5,781 5,819 5,728
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
---- ---- ---- ----
Net income $ 1,658 $ 2,454 $ 4,701 $ 5,481
Other comprehensive income (net of tax):
Foreign currency translation (44) -- (26) --
Investments available for sale -- (101) (67) (54)
------- ------- ------- -------
Comprehensive income $ 1,614 $ 2,353 $ 4,608 $ 5,427
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* Earnings per share does not total due to rounding.
SL Industries Inactive
Filed: 8 Nov 06, 12:00am