Exhibit 99.1
For Immediate Release
SL INDUSTRIES, INC. ANNOUNCES FINANCIAL RESULTS
FOR ITS SECOND QUARTER ENDED JUNE 30, 2007
MT. LAUREL, NEW JERSEY, AUGUST 13, 2007 . . . SL INDUSTRIES, INC. (AMEX &
PHLX: SLI) announced today that net sales for the second quarter ended June 30,
2007 were $52,730,000, compared to $43,114,000 for the second quarter last year,
an increase of $9,616,000, or 22%. Income from continuing operations was
$3,236,000, or $0.56 per diluted share, compared to income from continuing
operations of $2,107,000, or $0.36 per diluted share, for the same period in
2006. Second quarter results include the financial performance of MTE
Corporation ("MTE"), which was acquired on October 31, 2006. Net sales of MTE
for the second quarter were $5,060,000, with income from operations of $682,000.
Net sales from continuing operations for the six months ended June 30,
2007 were $101,057,000, compared to net sales of $82,399,000 for the six months
ended June 30, 2006, an increase of $18,658,000, or 23%. Income from continuing
operations for the six months ended June 30, 2007 was $5,275,000, or $0.91 per
diluted share, compared to income from continuing operations of $3,340,000, or
$0.58 per diluted share, for the same period last year. Net sales of MTE for the
six month period ended June 30, 2007 were $9,564,000, with income from
operations of $1,192,000.
Loss from discontinued operations, net of tax, was $789,000 for the first
six months of 2007, compared to a loss from discontinued operations, net of tax,
of $297,000 for the same period last year. Loss from discontinued operations,
net of tax, increased as a result of higher legal and consulting fees associated
with certain environmental matters. As a result, for the six-month period ended
June 30, 2007, the Company recorded net income of $4,486,000, or $0.78 per
diluted share, compared to net income of $3,043,000, or $0.52 per diluted share,
for the same period last year.
The Company's four business segments recorded strong results for the first
six months of 2007. SL Power Electronics Corp. recorded net sales of $47,255,000
and operating income of $4,192,000, as compared to net sales of $41,162,000 and
operating income of $3,343,000 for the same period in 2006. The results of SL
Power Electronics Corp. includes six months performance of the Ault business,
which was acquired on January 26, 2006, compared to five months performance in
2006. The High Power Group recorded net sales of $28,822,000 and operating
income of $3,791,000, as compared to net sales of $17,792,000 and operating
income of $2,835,000 for the same period last year. The High Power Group
includes the results of MTE. SL Montevideo Technology, Inc. recorded net sales
of $14,065,000 and operating income of $1,701,000, as compared to net sales of
$12,688,000 and operating income of $501,000 for the first six months of 2006.
RFL Electronics Inc. recorded net sales of $10,915,000 and operating income of
$849,000, as compared to net sales of $10,757,000 and operating income of
$710,000 for the same period last year.
Engineering and product development expenses for the first six months of
2007 increased by $183,000, or approximately 3%, as compared to the same period
last year. Not including MTE, engineering and product development expenses
decreased $251,000, or 4%. This decrease was primarily attributable to a 21%
decrease at SL-MTI, as that division incurred unusually large product
development expenses last year.
The Company reported net new orders of $51.9 million in the second quarter
of 2007, compared to net new orders of $49.2 million in the second quarter of
2006. Backlog at June 30, 2007 was $55.9 million, as compared to $58.0 million a
year earlier.
Commenting on the results, James Taylor, President and Chief Executive
Officer of SL Industries, said, "I am very pleased with the Company's
performance this year. In 2006 we initiated changes throughout the organization
to more effectively align resources to prevail in select market niches and to
implement lean manufacturing principles. These initiatives are now yielding
results. SL Power Electronics recorded a 9% increase in bookings and a 15%
increase in sales, largely as a result of several new program awards. Income
from operations improved 25% due to improved sourcing and operational
efficiencies. The sharp improvement of the High Power Group was attributable to
the performance of MTE, which has been an excellent addition to the Company's
power electronics business. The other member of the High Power Group, Teal
Electronics, recorded lower profitability on slightly higher sales as a result
of higher raw materials costs, unfavorable product mix and inefficiencies
incurred while transferring production to its new facility in Tecate, Mexico. I
expect margin at Teal to rebound in the second half."
Taylor stated, "SL Montevideo Technology continued its third consecutive
quarter of improvement since we initiated operational changes a year ago.
Commercial and military aerospace programs have driven consistent bookings and
sales growth over the period, while lean manufacturing principles have increased
margin and decreased working capital. We believe further improvement at SLMTI is
readily achievable."
Taylor continued, "RFL Electronics recorded stable bookings and sales for
the first half, as we have seen no change in overall market activity since our
last report. Margin improved due to a favorable product mix for the period. Over
the first six months of 2007, demand for power protection products increased and
orders for communications products decreased, compared to the same period last
year."
"We continue to believe that large scale investment is necessary to
upgrade the country's electric power transmission infrastructure. In April, RFL
received an award from the Utilities Telecommunications Council for Best Telecom
Product of 2007 with respect to its GARD 8000 product line. The GARD 8000, which
was judged with the products of several leading industry competitors, achieved
this award in recognition of its integrated teleprotection, powerline carrier,
Ethernet and multiplexing capabilities. We are proud of RFL's accomplishment and
will continue to invest to develop new innovative products to meet the future
needs of the utility industry."
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 $2,510,000 for the six month period ended
June 30, 2007, as compared to $2,356,000 for the same period in 2006. Corporate
expenses decreased to 2% of net sales for the first half of 2007, as compared to
3% of net sales for the same period last year."
In closing, Taylor said, "I'd like to take this opportunity to note that
the Company was named by Forbes Small Business one of the 100 fastest growing
small public companies in the United States, based upon its growth over the past
three-year period. The Company's success is a validation of the strategy we set
in 2003. We are proud of our dedicated employees that made this achievement
possible."
Taylor concluded, "On May 16, the Company held its Annual Shareholder's
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.
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,
2007 2006
------------- ------------
(Unaudited)
------------
ASSETS
Current assets:
Cash and cash equivalents $ 0 $ 757
Receivables, net 32,362 31,184
Inventories, net 22,646 21,090
Other current assets 4,853 3,766
-------- --------
Total current assets 59,861 56,797
-------- --------
Property, plant and equipment, net 11,270 12,132
Intangible assets, net 29,027 30,020
Other assets 8,032 7,594
-------- --------
Total assets $108,190 $106,543
======== ========
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Long term debt due within one year $ 15,560 $ --
Current liabilities 30,410 29,286
-------- --------
Total current liabilities 45,970 29,286
-------- --------
Long term debt, less portion due within one year -- 19,800
Other liabilities 6,985 7,038
Shareholders' equity 55,235 50,419
-------- --------
Total liabilities and shareholders' equity $108,190 $106,543
======== ========
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
--------- --------- --------- ----------
Net sales ...................................................... $ 52,730 $ 43,114 $ 101,057 $ 82,399
Cost and expenses:
Cost of products sold ..................................... 34,781 29,003 67,151 55,137
Engineering and product development ....................... 3,218 3,151 6,413 6,230
Selling, general and administrative ....................... 9,097 7,262 17,642 14,818
Depreciation and amortization ............................. 922 590 1,828 1,181
--------- --------- --------- ---------
Total cost and expenses ........................................ 48,018 40,006 93,034 77,366
--------- --------- --------- ---------
Income from operations ......................................... 4,712 3,108 8,023 5,033
Other income (expense):
Amortization of deferred financing costs .................. (22) (22) (44) (44)
Interest income ........................................... 1 1 18 29
Interest expense .......................................... (256) (170) (579) (299)
--------- --------- --------- ---------
Income from continuing operations before income taxes .......... 4,435 2,917 7,418 4,719
Income tax provision ........................................... 1,199 810 2,143 1,379
--------- --------- --------- ---------
Income from continuing operations .............................. 3,236 2,107 5,275 3,340
(Loss) from discontinued operations (net of tax) ............... (418) (185) (789) (297)
--------- --------- --------- ---------
Net income ..................................................... $ 2,818 $ 1,922 $ 4,486 $ 3,043
========= ========= ========= =========
BASIC NET INCOME (LOSS) PER COMMON SHARE
Income from continuing operations ......................... $ 0.57 $ 0.37 $ 0.94 $ 0.59
(Loss) from discontinued operations (net of tax) .......... (0.07) (0.03) (0.14) (0.05)
--------- --------- --------- ---------
Net income ................................................ $ 0.50 $ 0.34 $ 0.80 $ 0.54
========= ========= ========= =========
DILUTED NET INCOME (LOSS) PER COMMON SHARE
Income from continuing operations ......................... $ 0.56 $ 0.36 $ 0.91 $ 0.58
(Loss) from discontinued operations (net of tax) .......... (0.07) (0.03) (0.14) (0.05)
--------- --------- --------- ---------
Net income ................................................ $ 0.49 $ 0.33 $0.78 * $ 0.52*
========= ========= ========= =========
Shares used in computing basic net income (loss)
per common share .......................................... 5,638 5,631 5,639 5,620
Shares used in computing diluted net income (loss)
per common share .......................................... 5,801 5,824 5,786 5,807
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
--------- --------- --------- ----------
Net income .................................................. $ 2,818 $ 1,922 $ 4,486 $ 3,043
Other comprehensive income (net of tax):
Foreign currency translation .............................. (22) 22 (47) 28
Unrealized gain (loss) on securities ...................... 112 -- 112 (67)
--------- --------- --------- ---------
Comprehensive income ........................................ $ 2,908 $ 1,944 $ 4,551 $ 3,004
========= ========= ========= =========
* Earnings per share does not total due to rounding
