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FOR IMMEDIATE RELEASE
INVESTOR RELATIONS CONTACT: COMPANY CONTACT:
Neil Berkman or Melanie Beeler Owen Farren
Neil Berkman Associates President & CEO
(310) 277-5162 (856) 727-1500
info@BerkmanAssociates.com www.slpdq.com
SL INDUSTRIES, INC. ANNOUNCES FINANCIAL RESULTS FOR
ITS SECOND QUARTER ENDED JUNE 30, 2001
MT. LAUREL, NEW JERSEY, AUGUST 7, 2001 . . . SL INDUSTRIES, INC. (NYSE &
PHLX:SL) announced today that net sales from continuing operations for the
second quarter ended June 30, 2001 were $32.5 million (or $35.4 million
inclusive of discontinued operations), compared to net sales of $39.1 million
(or $44.1 million inclusive of discontinued operations) for the second quarter
last year, a decrease of $6.6 million or 17% ($8.7 million or 20% inclusive of
discontinued operations). Pro forma net loss from continuing operations was $0.1
million for the second quarter ended June 30, 2001, compared to pro forma net
income of $1.8 million for the same period last year. Pro forma net loss from
continuing operations for the second quarter ended June 30, 2001 excludes the
effects of restructuring costs of $0.7 million, net of taxes, and write down of
inventory of continuing operations of $1.9 million, net of taxes. Pro forma net
income from continuing operations for the second quarter ended June 30, 2000
excludes the effects of operating losses of discontinued operations of $1.0
million, net of taxes.
Actual net loss for the second quarter ended June 30, 2001 was $5.3
million, or $0.93 per diluted share, compared with actual net income of $0.8
million, or $0.14 per diluted share, for the same period last year.
Net sales from continuing operations for the six months ended June 30,
2001 were $70.1 million (or $79.1 million inclusive of discontinued operations),
compared to net sales of $76.5 million (or $87.7 million inclusive of
discontinued operations) for the six months ended June 30, 2000, a decrease of
$6.4 million or 8% ($8.6 million or 10%, inclusive of discontinued operations).
Pro forma net income from continuing operations was $0.4 million for the six
months ended June 30, 2001, compared to pro forma net income of $3.4 million for
the same period last year. Pro forma net income from continuing operations
excludes the effects of restructuring costs of $0.7 million, net of taxes, and
write down of inventory of continuing operations of $1.9 million, net of taxes.
Pro forma net income from continuing operations for the six months ended June
30, 2000 excludes the effects of operating losses of discontinued operations of
$2.0 million, net of taxes.
Actual net loss for the six months ended June 30, 2001 was $4.8 million,
or $0.85 per diluted share, compared with actual net income of $1.3 million, or
$0.23 per diluted share, for the same period last year.
In July 2001, the Board of Directors authorized the disposition of the
Company's SL Waber subsidiary. Operations of this subsidiary are expected to
continue until approximately September 30, 2001.
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SL INDUSTRIES, INC. ANNOUNCES FINANCIAL RESULTS FOR ITS SECOND QUARTER
ENDED JUNE 30, 2001
August 7, 2001
Page Two
The net losses of this subsidiary are included in the Consolidated Statements of
Operations under "discontinued operations." Net sales from discontinued
operations for the second quarter ended June 30, 2001 were $2.9 million,
compared to net sales of $5.0 million for the second quarter last year, a
decrease of $2.1 million or 42%. Actual net loss from discontinued operations
for the second quarter ended June 30, 2001 was $2.6 million, compared with
actual net loss of $1.0 million, net of taxes, for the same period last year.
Net sales from discontinued operations for the six months ended June 30, 2001
were $9.0 million, compared to net sales of $11.2 million for the six months
ended June 30, 2000, a decrease of $2.2 million or 20%. Actual net loss from
discontinued operations for the six months ended June 30, 2001 was $2.6 million,
compared with actual net loss of $2.0 million, for the same period last year.
The provision for loss from discontinued operations reflected in the
Consolidated Statement of Operations includes the write-down of the assets of
the subsidiary to estimated realizable values and the anticipated losses through
September 30, 2001, less the expected tax benefits applicable thereto.
During the second quarter ended June 30, 2001, the Company made two
announcements of programs to reduce its workforce, consolidate excess
facilities, and restructure certain business functions in response to the sudden
and substantial downturn in sales to telecommunications equipment manufacturers.
In these announcements, the Company stated it would record pre-tax restructuring
charges of $2.0 million ($1.3 million and $0.7 million), of which $1.1 million
was recorded in the second quarter. The additional $900,000 will be recognized
in the second half of 2001.
Commenting on the results, Owen Farren, President and Chief Executive
Officer of SL Industries, said, "As we have previously reported, SL Industries
has been and continues to be adversely affected in its Condor, Teal and Waber
business units by the sudden and substantial decline in telecommunications and
semiconductor capital spending. For the second quarter, order intake at Condor
and Teal was $14.7 million, as compared to $22.9 million for the same period
last year. This decline, the related cancellation of customer orders and
programs, as well as the drop in electronic component pricing led to the
Company's inventory charge of $1.9 million, net of taxes, and the restructuring
charges of $2.0 million. In addition, the Company is experiencing softening in
industrial distribution, as many of its major distributors work to reduce their
inventories. Both Condor and Teal, however, have been awarded a number of
important new OEM programs from medical, semiconductor, telecommunications, and
other industrial equipment manufacturers."
"The Company's other major business units performed well. At RFL
Electronics, order intake for the second quarter of 2001 was $7.2 million, as
compared to $5.4 million for the same period last year. In the Company's power
motion group, SL Montevideo Technology and Elektro-Metall Export, order intake
for the second quarter of 2001 was $14.2 million, as compared to $11.3 million
for the same period last year."
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SL INDUSTRIES, INC. ANNOUNCES FINANCIAL RESULTS FOR ITS SECOND QUARTER
ENDED JUNE 30, 2001
August 7, 2001
Page Three
Farren continued, "The Company continues to take strong measures to
conserve cash. The Company believes it will have adequate liquidity from
operations and through its credit facility to fund operations and working
capital requirements through the end of the third quarter. It is actively
seeking to raise additional funds in the near term through the sale or other
disposition of certain of its non-operating assets and is engaged in discussions
with its current lenders regarding its liquidity position and working capital
needs. The Company is seeking to obtain additional financing through other
sources. We cannot be certain that the Company will be able to obtain additional
funds, sufficient to conduct its operations, on satisfactory terms, in which
event its ability to continue operations as presently conducted will be
materially adversely affected."
Farren concluded, "SL Industries is continuing its discussions with
potential acquirers. As we recently announced, based on interest expressed by
certain parties, the Company has directed Credit Suisse First Boston to solicit
interest in SL's power electronics group and power motion group separately,
while it continues to work with us in pursuing the original process to sell the
entire Company. We anticipate that by the end of August interested parties will
have completed their due diligence reviews and submitted formal offers for
evaluation."
CONFERENCE CALL
SL Industries has scheduled a conference call today at 11:00 AM EDT to
discuss its results for the second quarter of 2001. A simultaneous WebCast of
the conference call may be accessed online at www.StreetFusion.com or at
www.slpdq.com. A replay will be available immediately following the WebCast at
these same Internet addresses. For a telephone replay, dial (800) 633-8284,
reservation #18087959 beginning at approximately 1:00 PM EDT.
ABOUT SL INDUSTRIES
SL Industries, Inc. designs, manufactures and markets Power and Data
Quality (PDQ) equipment and systems for industrial, medical, aerospace and
consumer applications. For more information about SL Industries, Inc. and
its products, please visit the Company's web site at www.slpdq.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 reductions
undertaken by the Company, the Company's ability to obtain adequate working
capital on satisfactory terms, the Company's ability to meet its obligations
under its credit facility or to obtain waivers thereof, 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)
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SL INDUSTRIES, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(All amounts in thousands, except for per share data)
Three-Months Ended Six-Months Ended
June 30, June 30,
2001 2000 2001 2000
-------- -------- -------- --------
Net sales ........................................ $ 32,479 $ 39,098 $ 70,061 $ 76,507
-------- -------- -------- --------
Cost and expenses:
Cost of products sold ........................ 22,486 25,113 47,774 48,660
Engineering and product development .......... 2,253 2,508 4,581 5,020
Selling, general and administrative .......... 6,659 6,850 13,489 13,658
Depreciation and amortization ................ 1,167 1,110 2,313 2,308
-------- -------- -------- --------
Total cost and expenses .......................... 32,565 35,581 68,157 69,646
-------- -------- -------- --------
Income (loss) from operations .................... (86) 3,517 1,904 6,861
Other income (expense):
Interest income .............................. 107 138 179 202
Interest expense ............................. (757) (755) (1,460) (1,515)
-------- -------- -------- --------
Income (loss) from continuing
operations before income taxes .................. (736) 2,900 623 5,548
Income taxes ..................................... (637) 1,108 211 2,201
-------- -------- -------- --------
PRO FORMA INCOME (LOSS) FROM CONTINUING OPERATIONS (99) 1,792 412 3,347
Restructuring costs (net of taxes) ............... 728 0 728 0
Write-down of inventory (net of taxes) ........... 1,899 0 1,899 0
Discontinued operations (net of taxes) ........... 2,586 996 2,618 2,003
-------- -------- -------- --------
Actual net income (loss) ......................... $ (5,312) $ 796 $ (4,833) $ 1,344
======== ======== ======== ========
BASIC NET INCOME PER COMMON SHARE
Income (Loss) from continuing operations ..... $ (0.02) $ 0.32 $ 0.07 $ 0.60
Restructuring costs of continuing operations . (0.46) 0.00 (0.46) 0.00
Discontinued operations ...................... (0.45) (0.18) (0.46) (0.36)
-------- -------- -------- --------
Net Income (Loss) ............................ $ (0.93) $ 0.14 $ (0.85) $ 0.24
======== ======== ======== ========
DILUTED NET INCOME PER COMMON SHARE
Income (Loss) from continuing operations ..... $ (0.02) $ 0.31 $ 0.07 $ 0.58
Restructuring costs of continuing operations . (0.46) 0.00 (0.46) 0.00
Discontinued operations ...................... (0.45) (0.17) (0.46) (0.35)
-------- -------- -------- --------
Net Income (Loss) ............................ $ (0.93) $ 0.14 $ (0.85) $ 0.23
======== ======== ======== ========
Shares used in computing basic
net income (loss) per common share ............. 5,705 5,615 5,690 5,621
Shares used in computing diluted
net income (loss) per common share ............ 5,705 5,714 5,690 5,768
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SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(All amounts in thousands, except for per share data)
Three-Months Ended Six-Months Ended
June 30, June 30,
2001 2000 2001 2000
-------- -------- -------- --------
Net sales .................................................. $ 32,479 $ 39,098 $ 70,061 $ 76,507
Cost and expenses:
Cost of products ....................................... 22,486 25,113 47,774 48,660
Write-down of inventory ................................ 2,890 0 2,890 0
Engineering and product development .................... 2,253 2,508 4,581 5,020
Selling, general and administrative .................... 6,659 6,850 13,489 13,658
Depreciation and amortization .......................... 1,167 1,110 2,313 2,308
Restructuring costs .................................... 1,108 0 1,108 0
-------- -------- -------- --------
Total cost and expenses .................................... 36,563 35,581 72,155 69,646
-------- -------- -------- --------
Income (loss) from operations .............................. (4,084) 3,517 (2,094) 6,861
Other income (expense):
Interest income ........................................ 107 138 179 202
Interest expense ....................................... (757) (755) (1,460) (1,515)
-------- -------- -------- --------
Income (loss) from continuing operations before income taxes (4,734) 2,900 (3,375) 5,548
Income taxes ............................................... (2,008) 1,108 (1,160) 2,201
-------- -------- -------- --------
Income (loss) from continuing operations ................... (2,726) 1,792 (2,215) 3,347
-------- -------- -------- --------
Discontinued operations (net of tax) ....................... (2,586) (996) (2,618) (2,003)
-------- -------- -------- --------
Net income (loss) .......................................... $ (5,312) $ 796 $ (4,833) $ 1,344
======== ======== ======== ========
BASIC NET INCOME (LOSS) PER COMMON SHARE
Income (loss) from continuing operations ............... $ (0.48) $ 0.32 $ (0.39) $ 0.60
Discontinued operations (net of tax) ................... (0.45) (0.18) (0.46) (0.36)
-------- -------- -------- --------
Net Income (loss) ...................................... $ (0.93) $ 0.14 $ (0.85) $ 0.24
======== ======== ======== ========
DILUTED NET INCOME (LOSS) PER COMMON SHARE
Income (loss) from continuing operations ............... $ (0.48) $ 0.31 $ (0.39) $ 0.58
Discontinued operations (net of tax) ................... (0.45) (0.17) (0.46) (0.35)
-------- -------- -------- --------
Net Income (loss) ...................................... $ (0.93) $ 0.14 $ (0.85) $ 0.23
======== ======== ======== ========
Shares used in computing basic net income (loss)
per common share ......................................... 5,705 5,615 5,690 5,621
Shares used in computing diluted net income (loss)
per common share ......................................... 5,705 5,714 5,690 5,768
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS
(Unaudited)
Three-Months Ended Six-Months Ended
June 30, June 30,
2001 2000 2001 2000
------- ----- ------- -------
Net income (loss) ....................................... $(5,312) $ 796 $(4,833) $ 1,344
Currency translation adjustment, net of related taxes 134 (38) 65 (26)
------- ----- ------- -------
Comprehensive income (loss) ............................. $(5,178) $ 758 $(4,768) $ 1,318
======= ===== ======= =======
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SL INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(All amounts in thousands)
June 30, December 31,
2001 2000
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents ..................................................... $ 0 $ 1,189
Receivables, less allowances of $1,996 and $2,235, respectively ............... 19,282 20,312
Inventories ................................................................... 21,048 23,491
Prepaid expenses .............................................................. 1,064 1,140
Net current assets of discontinued operations ................................. 4,401 4,866
Deferred income taxes ......................................................... 7,403 4,864
--------- ---------
Total current assets ..................................................... 53,198 55,862
Property, plant and equipment, less
accumulated depreciation of $16,647 and $16,857 respectively ................... 19,800 19,781
Fixed assets of discontinued operations, less accumulated depreciation ........... 753 980
Long-term note receivable ........................................................ 2,099 2,118
Deferred income taxes ............................................................ 1,291 1,629
Cash surrender value of life insurance policies .................................. 12,022 11,486
Intangible assets, less accumulated amortization of $6,008 and $5,356 respectively 20,169 20,770
Other assets ..................................................................... 811 855
--------- ---------
Total assets ............................................................. $ 110,143 $ 113,481
========= =========
LIABILITIES
Current liabilities:
Short-term debt ............................................................... $ 869 $ 0
Long-term debt due within one year ............................................ 36,438 186
Accounts payable .............................................................. 7,845 11,309
Accrued income taxes .......................................................... 1,639 724
Accrued liabilities:
Payroll and related costs ................................................... 4,942 5,070
Other ....................................................................... 9,744 7,393
--------- ---------
Total current liabilities ................................................ 61,477 24,682
Long-term debt less portion due within one year .................................. 1,009 36,533
Deferred compensation and supplemental retirement benefits ....................... 5,957 5,892
Other liabilities ................................................................ 2,552 3,024
--------- ---------
Total liabilities ........................................................ $ 70,995 $ 70,131
SHAREHOLDERS' EQUITY
Preferred stock, no par value; authorized, 6,000 shares; none issued ............. $ 0 $ 0
Common stock, $.20 par value; authorized, 25,000 shares; issued 8,298 shares ..... 1,660 1,660
Capital in excess of par value ................................................... 38,952 38,455
Retained earnings ................................................................ 14,714 19,547
Accumulated other comprehensive income ........................................... 127 62
Treasury stock at cost, 2,588 and 2,639 shares, respectively ..................... (16,305) (16,374)
--------- ---------
Total shareholders' equity ............................................... 39,148 43,350
--------- ---------
Total liabilities and shareholders' equity ............................... $ 110,143 $ 113,481
========= =========