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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT
(DATE OF EARLIEST EVENT REPORTED)
May 1, 1997
Commission file number 1-4987
SL INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
NEW JERSEY 21-0682685
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
520 FELLOWSHIP ROAD, SUITE A114, MT. LAUREL, NJ 08054
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 609-727-1500
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ITEM 2. DISPOSITION OF ASSETS
On May 1, 1997, SL Auburn, Inc., a wholly-owned subsidiary of the Registrant
with operations in Auburn, NY sold substantially all of its assets, excluding
its real property, to Champion Spark Plug Company, a wholly owned subsidiary of
Cooper Industries, Inc., pursuant to an Asset Purchase Agreement dated as of
May 1, 1997, (the "Purchase Agreement").
The consideration for the assets sold, arrived at by negotiation among the
parties, consisted entirely of cash in the amount of $11,979,000, out of which
certain additional expenses related to the transaction will be paid.
Furthermore, the purchase price is subject to adjustment, depending upon the
value of the net assets, as defined in the Purchase Agreement, of the seller at
the closing date, the final amount of which has not yet been determined.
Nevertheless, it is anticipated that the transaction will result in a
substantial after-tax gain, which will be reflected in the Registrant's
consolidated financial statements for the third quarter of its fiscal year
ending July 31, 1997. Additionally, cash consideration in the amount of
$50,000 was received for a covenant not to compete.
There is no material relationship between the acquiring person and the
Registrant or any of the Registrant's affiliates, directors or officers, or any
associate of any such director or officer.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired
Not applicable.
(b) Pro Forma Financial Information.
Pro forma condensed consolidated balance sheet - January 31, 1997
(unaudited)
Pro forma condensed consolidated statements of operations - year ended
July 31, 1996 (unaudited)
Pro forma condensed consolidated statements of operations - six-months
ended January 31, 1997 (unaudited)
Notes to pro forma condensed financial statements
(c) Exhibits.
The information called for by this section is incorporated herein by
reference to the Exhibit Index of this report.
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INDEX TO EXHIBITS
The exhibit number and description in the original copy of this
document is as follows:
Exhibit Description
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2.1 Asset Purchase Agreement dated as of May 1, 1997, by and
between SL Auburn, Inc. and Champion Spark Plug Company*
* Portions of this exhibit have been omitted and separately
filed with the Commission pursuant to a request for
confidential treatment under Rule 24b-2.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SL INDUSTRIES, INC.
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Registrant
Dated: May 15, 1997 /s/ Owen Farren
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Owen Farren
President and Chief Executive Officer
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SL INDUSTRIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
JANUARY 31, 1997
Pro Forma Pro Forma
As Reported SL Auburn Adjustments Consolidated
----------- --------- ----------- ------------
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . $ 2,074,000 $12,205,000 $(11,700,000) (A) $ 2,579,000
Receivables, net of allowances . . . . . . . . . 16,837,000 (1,453,000) - 15,384,000
Inventories . . . . . . . . . . . . . . . . . . 17,487,000 (2,593,000) - 14,894,000
Prepaid expenses . . . . . . . . . . . . . . . . 994,000 (70,000) - 924,000
Deferred income taxes . . . . . . . . . . . . . 2,423,000 - - 2,423,000
----------- ----------- ------------ ------------
Total current assets . . . . . . . . . . . 39,815,000 8,089,000 (11,700,000) 36,204,000
----------- ----------- ------------ ------------
Property, plant and equipment, net . . . . . . . . 8,227,000 (1,544,000) - 6,683,000
Long-term notes receivable . . . . . . . . . . . . 2,250,000 - - 2,250,000
Deferred income taxes . . . . . . . . . . . . . . 2,257,000 - - 2,257,000
Cash surrender value of life insurance policies . 7,348,000 - - 7,348,000
Intangible assets, net . . . . . . . . . . . . . . 7,458,000 - - 7,458,000
Other assets . . . . . . . . . . . . . . . . . . . 1,252,000 (26,000) - 1,226,000
----------- ----------- ------------ ------------
Total assets . . . . . . . . . . . . . . . $68,607,000 $ 6,519,000 $(11,700,000) $ 63,426,000
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LIABILITIES
Current liabilities:
Long-term debt due within one year . . . . . . . $ 133,000 - - $ 133,000
Accounts payable . . . . . . . . . . . . . . . . 6,853,000 (527,000) - 6,326,000
Other accrued liabilities . . . . . . . . . . . 11,486,000 3,546,000 - 15,032,000
----------- ----------- ------------ ------------
Total current liabilities . . . . . . . . . 18,472,000 3,019,000 - 21,491,000
----------- ----------- ------------ ------------
Long-term debt less portion due within one year. . 11,833,000 - (11,700,000) (A) 133,000
Deferred compensation and other liabilities . . . 7,743,000 - - 7,743,000
----------- ----------- ------------ ------------
Total liabilities . . . . . . . . . . . . . $38,048,000 $ 3,019,000 $(11,700,000) $ 29,367,000
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Commitments and contingencies
SHAREHOLDERS' EQUITY
Preferred stock, no par value;
authorized, 6,000,000 shares; none issued . . . $ - $ - $ - -
Common stock, $.20 par value;
authorized, 25,000,000 shares; issued, 7,920,000 1,584,000 - - 1,584,000
Capital in excess of par value . . . . . . . . . . 34,510,000 - - 34,510,000
Retained earnings . . . . . . . . . . . . . . . . 3,867,000 3,500,000 - 7,367,000
Treasury stock at cost, 2,141,000 shares . . . . . (9,402,000) - - (9,402,000)
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Total shareholders' equity . . . . . . . . 30,559,000 3,500,000 - 34,059,000
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Total liabilities & shareholders' equity . $68,607,000 $ 6,519,000 $(11,700,000) $63,426,000
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See accompanying notes to unaudited pro forma condensed consolidated
financial statements.
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SL INDUSTRIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
YEAR ENDED JULY 31, 1996
Pro Forma Pro Forma
As Reported SL Auburn Adjustments Consolidated
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Net sales . . . . . . . . . . . . . . . . . . . . . . . . . $117,313,000 $(10,766,000) $ - $106,547,000
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Cost and expenses:
Cost of products sold . . . . . . . . . . . . . . . . . . 76,773,000 (8,024,000) - 68,749,000
Engineering and product development . . . . . . . . . . . 4,713,000 (141,000) 4,572,000
Selling, general and administrative expenses . . . . . . 26,884,000 (1,568,000) - 25,316,000
Depreciation and amortization . . . . . . . . . . . . . . 2,584,000 (256,000) - 2,328,000
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Total cost and expenses . . . . . . . . . . . . . . . . . . 110,954,000 (9,989,000) - 100,965,000
------------ ------------ -------- ------------
Income from operations . . . . . . . . . . . . . . . . . . 6,359,000 (777,000) - 5,582,000
Other income (expense):
Interest income . . . . . . . . . . . . . . . . . . . . . 159,000 - - 159,000
Interest expense . . . . . . . . . . . . . . . . . . . . (1,123,000) - 756,000 (A) (367,000)
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Income from continuing operations before income taxes . . . 5,395,000 (777,000) 756,000 5,374,000
Provision for federal and state income taxes . . . . . . . 1,897,000 (301,000) 293,000 (A) 1,889,000
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Income from continuing operations (Note B) . . . . . . . . $ 3,498,000 $ (476,000) $463,000 $ 3,485,000
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Income per common share from continuing operations (Note B) $ 0.59 $ 0.59
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Weighted average number of shares outstanding . . . . . . . 5,950,000 5,950,000
See accompanying notes to unaudited pro forma condensed consolidated
financial statements.
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SL INDUSTRIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
SIX-MONTHS ENDED JANUARY 31, 1997
Pro Forma Pro Forma
As Reported SL Auburn Adjustments Consolidated
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Net sales . . . . . . . . . . . . . . . . . . . . . . . . . $57,097,000 $(5,607,000) $ - $51,490,000
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Cost and expenses:
Cost of products sold . . . . . . . . . . . . . . . . . . 36,715,000 (4,041,000) - 32,674,000
Engineering and product development . . . . . . . . . . . 2,523,000 (114,000) 2,409,000
Selling, general and administrative expenses . . . . . . 13,122,000 (770,000) - 12,352,000
Depreciation and amortization . . . . . . . . . . . . . . 1,371,000 (124,000) - 1,247,000
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Total cost and expenses . . . . . . . . . . . . . . . . . . 53,731,000 (5,049,000) - 48,682,000
----------- ----------- -------- -----------
Income from operations . . . . . . . . . . . . . . . . . . 3,366,000 (558,000) - 2,808,000
Other income (expense):
Interest income . . . . . . . . . . . . . . . . . . . . . 133,000 - - 133,000
Interest expense . . . . . . . . . . . . . . . . . . . . (464,000) 15,000 270,000 (A) (179,000)
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Income from continuing operations before income taxes . . . 3,035,000 (543,000) 270,000 2,762,000
Provision for federal and state income taxes . . . . . . . 1,191,000 (186,000) 104,000 (A) 1,109,000
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Income from continuing operations (Note B) . . . . . . . . $ 1,844,000 $ (357,000) $166,000 $ 1,653,000
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Income per common share from continuing operations (Note B) $ 0.31 $0.27
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Weighted average number of shares outstanding . . . . . . . 6,027,000 6,027,000
See accompanying notes to unaudited pro forma condensed consolidated
financial statements.
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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
The pro forma statements may not be indicative of the results that would have
occured if the disposition had been effective on the dates indicated. The
purchase price used to calculate the after tax gain is subject to adjustment,
however, the estimate made is not expected to differ materially from final
results.
A. Reflects the use of the sale proceeds to reduce long-term debt.
B. Income from continuing operations and income per common share
exclude an estimated after tax gain from the disposition
of $3,500,000.