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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 UPDATES BUSINESS DEVELOPMENTS
Completes Telecom Restructuring Program With Closure of
Reynosa, Mexico Facility
MT. LAUREL, NEW JERSEY, October 10, 2001 . . . SL INDUSTRIES, INC.
(NYSE & PHLX:SL) today provided an update on business developments and announced
that it has completed its planned restructuring in response to the slowdown in
the telecommunications industry, with the closure of its manufacturing facility
in Reynosa, Mexico.
Owen Farren, President and Chief Executive Officer, said, "To further
reduce the impact on SL Industries of the slowdown in the telecommunications
market, the Company's Condor D.C. Power Supplies subsidiary will close its
manufacturing plant in Reynosa, Mexico and consolidate operations in its
facility in Mexicali, Mexico. We expect these actions to further improve
operating profits and cash flow, while maintaining Condor's flexibility to meet
increased demand for power supplies for customers in the telecommunications
industry when conditions improve. The Company will record an additional
restructuring charge of approximately $2.5 million in connection with the
closure of the Reynosa facility."
Farren continued, "As a result of aggressive cash management, cost
reductions and restructuring activities, the Company's financial condition has
significantly improved over the last quarter. In addition, the Company has
experienced continued strength in all of its business segments other than the
semiconductor and telecommunications markets. Assuming that business activity
continues at its current levels and the Company is able to draw on its revolving
credit facility, we anticipate that the Company will have adequate liquidity to
fund operations and working capital requirements."
As previously announced, the Company obtained a waiver of certain
financial covenants in its revolving credit facility for the fiscal quarters
ended March 31, 2001, and June 30, 2001. The Company has advised its banks that
it will be in default of the financial covenants in the revolving credit
facility for the quarter ended September 30, 2001 and is currently in
discussions with its banks to amend its financial covenants for such quarter and
beyond.
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SL INDUSTRIES UPDATES BUSINESS DEVELOPMENTS
October 10, 2001
Page 2
As the Company and its banks are still in negotiations, it is too early to
determine if these discussions will be successful. If the Company and the banks
are unable to reach an agreement, the Company's ability to continue operations
as presently conducted will be materially adversely affected.
Farren concluded, "As mentioned earlier, the Company has experienced
strong activity in all of its business segments, other than sales to the
semiconductor and telecommunications markets. Although the Company has not yet
been adversely impacted by the attacks of September 11, it is still too early to
determine future business conditions as a result of the attacks. The Company's
SL-Montevideo Technology and Elektro-Metall Export subsidiaries engage in
substantial business in the aerospace sector, serving both defense and
commercial aerospace customers. As previously announced, we know of no
development or event to account for the recent unusual trading activity in
shares of the Company's common stock.
"The recent attacks have, however, impacted the capital markets and
delayed the sales process for the Company and its business segments. The Company
and Credit Suisse First Boston expect to conclude preliminary discussions with
potential purchasers and complete analyses of proposed transactions by the end
of October."
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 restructuring and other cost reduction actions undertaken by the Company,
the timing and degree of any business recovery in certain of the Company's
markets that are currently experiencing an economic downturn, 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, 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. Those conditions include increased
economic uncertainty and political instability following the terrorist attacks
in the United States on September 11, 2001. 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.
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