EXHIBIT 99
For Immediate Release
SL INDUSTRIES, INC. ANNOUNCES FINANCIAL RESULTS FOR
ITS SECOND QUARTER ENDED JUNE 30, 2002
MT. LAUREL, NEW JERSEY, AUGUST 19, 2002 . . . SL INDUSTRIES, INC. (NYSE
& PHLX:SL) announced today that revenue for the second quarter ended June 30,
2002 was $34,409,000, compared to $32,479,000 for the second quarter last year,
an increase of $1,930,000, or 6%. Net income from continuing operations was
$331,000, or $0.06 per diluted share, compared to net loss of ($2,726,000), or
($0.48) per diluted share, for the same period in 2001. Discontinued operations
had no impact on income in the current quarter, compared to a net loss of
($2,586,000), or ($0.45) per diluted share, in the second quarter of 2001.
The net loss from continuing operations for the second quarter of 2001
included goodwill amortization of $102,000, which, if not included consistent
with reporting in 2002, would have reduced the net loss from continuing
operations for the second quarter 2001 to ($2,624,000).
Net sales from continuing operations for the six months ended June 30,
2002 were $67,356,000, compared to net sales of $70,061,000 for the six months
ended June 30, 2001, a decrease of $2,705,000, or 4%. Net loss from continuing
operations for the six months ended June 30, 2002 was ($358,000), or ($0.06) per
diluted shared, compared to net loss of ($2,215,000), or ($0.39) per diluted
share, for the same period last year. Discontinued operations contributed net
income of $313,000, or $.05 per diluted share, for the six months ended June 30,
2002, compared to a net loss of ($2,618,000), or ($0.46) per diluted share for
the same period last year.
The net loss from continuing operations for the six months ended June
30, 2001 included goodwill amortization of $185,000, which, if not included
consistent with reporting in 2002, would have reduced the net loss from
continuing operations for the six months ended June 30, 2001 to ($2,030,000).
Consolidated net sales from continuing operations for the three-month
period ended June 30,2002 increased by $1.9 million, or 6%, compared to the same
quarter last year. This was due to significant increases in sales at Teal, MTI,
and RFL. Sales at Condor decreased by $2.8 million, or 23%. Condor's sales were
adversely impacted by its reduction of a significant amount of products offered
under its telecommunications-related product line. EME, which had a marginal
increase in sales, was principally affected by lower sales in the European
commercial aerospace market.
The Company had income from operations of $711,000 for the three-month
period ended June 30, 2002, as compared to an operating loss of $4,084,000 for
the corresponding prior period
last year. During the quarter ended June 30, 2001, the Company recorded (a) a
charge of $1,108,000 as a result of the restructuring charges recorded at
Condor, and (b) an inventory write down of $2,890,000 due to the decline in
orders in the telecommunication business at Condor.
Without these charges the Company would have recorded an operating loss
of ($86,000) for the quarter ended June 30, 2001. There were no significant
restructuring charges or write-downs recorded in the quarter ended June 30,
2002. The current quarter's operating income does not include any goodwill
amortization. The gross amount of goodwill amortized in the prior year quarter
was $166,000.
During the first six months of 2002, the Company generated adequate
amounts of cash to meet its operating needs. During the first six months of
2002, Teal, RFL and MTI produced positive cash flow, aggregating approximately
$5,000,000. Condor, EME and Surf Tech experienced negative cash flow for the
same period. Condor's cash flow was negatively impacted by $575,000 of payments
against its restructuring reserve and deferred compensation payments of
$1,252,000. Without these cash payments, Condor would have been cash flow
positive. EME experienced negative cash flow primarily due to the pay down of
debt and performance under a long-term contract for which it received a large
cash advance in 2001. Surf Tech's negative cash flow was primarily due to its
consolidation into one location. With the exception of Surf Tech and the segment
that consists primarily of corporate office expenses and accruals not
specifically allocated to the reportable business units, all of the Company's
operating segments were profitable at the operating level for the first six
months of 2002. Surf Tech's operating loss was $485,000. Surf Tech is facing
historically low demand in its marketplace and its operations have been
consolidated into one facility. The Company incurred during the six months ended
June 30, 2002, (a) special charges of $1,834,000 related to the
change-of-control and proxy costs, and (b) an addition of $1,202,000 to the
reserve for environmental matters, professional fees and other expenses. Please
see the Company's Form 10-Q for the quarterly period ended June 30, 2002 for
data regarding the results of operations of the Company's business units.
As of June 30, 2002, the Company had principal debt outstanding of
$20.3 million under its revolving credit facility, as compared to $35.7 million
at December 31, 2001. At August 16, 2002, the principal debt outstanding under
the revolving credit facility had decreased to approximately $18.8 million,
principally as the result of the collection of approximately $1.4 million in
German tax refunds.
On July 18, 2002 the Company sold its real property located in Auburn,
New York for $175,000 in cash. The Auburn property is the former industrial site
of SL Auburn, Inc., a manufacturer of spark plugs and ignition systems. SL
Auburn, Inc. was sold by the Company in May 1997. The gain from this transaction
will be recorded in the Company's third quarter financial results.
On August 9, 2002, the Company received a "Demand for Arbitration" with
respect to a claim of $578,000 from a former vendor of SL Waber. The assets of
SL Waber were sold in 2001. The claim concerns a dispute for alleged failure to
pay for goods under a Supplier Agreement. The Company believes this claim is
without merit and intends to vigorously pursue its defenses with respect to this
claim and may bring counter claims against the vendor. Notwithstanding the
outcome of these allegations, the Company believes that this arbitration will
not have a material adverse effect on its business or operations.
The Company reported net new orders of $38,520,000 in the second
quarter of 2002, compared to net new orders of $37,347,000 in the second quarter
of 2001. Backlog at June 30, 2002 was $61.5 million, as compared to $60.4
million a year earlier.
Commenting on the results, Warren Lichtenstein, Chairman and Chief
Executive Officer of SL Industries, Inc., said, "The financial results represent
the first quarterly profit reported by the Company in over a year. With the
exception of continued softness in the semiconductor and commercial aerospace
industries, the Company experienced stable sales in its served market niches.
The sales decrease for the six months largely represents the Company's strategic
withdrawal of several product offerings in the telecommunications market."
Lichtenstein continued, "We are also making progress on a number of
corporate initiatives. The Company's financial advisor, Imperial Capital, LLC,
is beginning the process of contacting financial and strategic buyers to
consider a sale of all or part of the Company's business. At the same time,
management is in discussions with a number of commercial lenders to secure new
long-term financing to replace the Company's current line of credit. In
addition, we recently promoted James Taylor to Chief Executive Officer of the
newly established Power Electronics Group, which is comprised of the Company's
Condor D.C. Power Supplies and Teal Electronics subsidiaries. Jim has done an
excellent job as president of Teal and we are confident that his energy and
talent will allow the Power Electronics Group to achieve its full potential."
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 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)
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three-Months Ended * Six-Months Ended *
June 30, June 30,
2002 2001 2002 2001
--------------- -------------- -------------- ---------------
Net sales $ 34,409,000 $ 32,479,000 $ 67,356,000 $ 70,061,000
--------------- -------------- -------------- ---------------
Cost and expenses:
Cost of products sold 23,369,000 22,486,000 44,702,000 47,774,000
Write-down of inventory - 2,890,000 - 2,890,000
Engineering and product development 1,834,000 2,253,000 4,050,000 4,581,000
Selling, general and administrative 7,576,000 6,659,000 14,862,000 13,489,000
Depreciation and amortization 870,000 1,167,000 1,744,000 2,313,000
Special charges 9,000 - 1,834,000 -
Restructuring costs 40,000 1,108,000 265,000 1,108,000
--------------- -------------- -------------- ---------------
Total cost and expenses 33,698,000 36,563,000 67,457,000 72,155,000
--------------- -------------- -------------- ---------------
Income (loss) from operations 711,000 (4,084,000) (101,000) (2,094,000)
Other income (expense):
Interest income 62,000 107,000 140,000 179,000
Interest expense (431,000) (757,000) (985,000) (1,460,000)
--------------- -------------- -------------- ---------------
Income (loss) from continuing operations before
income taxes 342,000 (4,734,000) (946,000) (3,375,000)
Income tax provision (benefit) 11,000 (2,008,000) (588,000) (1,160,000)
--------------- -------------- -------------- ---------------
Income (loss) from continuing operations 331,000 (2,726,000) (358,000) (2,215,000)
Discontinued operations (net of tax) - (2,586,000) 313,000 (2,618,000)
--------------- -------------- -------------- ---------------
Net income (loss) $ 331,000 $ (5,312,000) $ (45,000) $ (4,833,000)
=============== ============== ============== ===============
BASIC NET INCOME (LOSS) PER COMMON SHARE
Income (loss) from continuing operations $ 0.06 $ (0.48) $ (0.06) $ (0.39)
Discontinued operations (net of tax) - (0.45) 0.05 (0.46)
--------------- -------------- -------------- ---------------
Net income (loss) $ 0.06 $ (0.93) $ (0.01) $ (0.85)
=============== ============== ============== ===============
DILUTED NET INCOME (LOSS) PER COMMON SHARE
Income (loss) from continuing operations $ 0.06 $ (0.48) $ (0.06) $ (0.39)
Discontinued operations (net of tax) - (0.45) 0.05 (0.46)
--------------- -------------- -------------- ---------------
Net income (loss) $ 0.06 $ (0.93) $ (0.01) $ (0.85)
=============== ============== ============== ===============
Shares used in computing basic net income (loss)
per common share 5,894,000 5,705,000 5,839,000 5,690,000
Shares used in computing diluted net income (loss)
per common share 5,930,000 5,705,000 5,839,000 5,690,000
* RECLASSIFIED FOR COMPARATIVE PURPOSES ONLY.
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS
(Unaudited)
Three-Months Ended Six-Months Ended
June 30, June 30,
2002 2001 2002 2001
-------------- ---------------- -------------- ----------------
Net income (loss) $ 331,000 $ (5,312,000) $ (45,000) $ (4,833,000)
Other comprehensive income (loss):
Currency translation adjustment, net of related
taxes 389,000 (38,000) 402,000 (26,000)
-------------- ---------------- -------------- ----------------
Comprehensive income (loss) $ 720,000 $ (5,350,000) $ 357,000 $ (4,859,000)
============== ================ ============== ================
SL INDUSTRIES, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2002 2001
-------------- ----------------
(Unaudited)
Cash and cash equivalents $ 2,722 $ 6,577
Accounts receivable, net 21,762 36,041
Inventories, net 19,582 20,497
Other current assets 7,449 7,115
-------------- ----------------
Total current assets 51,515 70,230
Property, plant and equipment, net 18,574 18,829
Intangible assets, net 14,602 14,799
Other assets 3,434 3,900
-------------- ----------------
Total assets $ 88,125 $ 107,758
============== ================
Current liabilities $ 26,172 $ 30,925
Long-term debt due within one year 20,387 35,829
Other liabilities 7,085 7,800
Shareholders' equity 34,481 33,204
-------------- ----------------
Total liabilities and shareholders' equity $ 88,125 $ 107,758
============== ================