1 UNITED STATES SECURITIES & EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K/A ANNUAL REPORT [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 AMENDMENT #1 FOR THE FISCAL YEAR ENDED JULY 31, 1997 FORM 11-K FOR SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN SL INDUSTRIES, INC. 520 FELLOWSHIP ROAD, SUITE A-114 MT. LAUREL, NJ 08054 (Name & address of Principal Executive Offices of the issuer of the Securities) 21-0682685 (I.R.S. Employer Identification No.) DOCUMENTS INCORPORATED BY REFERENCE: COMPANY'S FORM S-8 REGISTRATION STATEMENT (FILE NO. 33-31805) 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the plan) have duly caused this annual report to be signed by the undersigned thereunto duly authorized. SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN /s/ James E. Morris ---------------------------------- James E. Morris Plan Administrator January 27, 1998 3 SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN INDEX TO FINANCIAL STATEMENTS AND SCHEDULES Pages ----- Report of Independent Public Accountants 4 Financial Statements: Statements of Net Assets Available for Plan Benefits, July 31, 1997 and 1996 5-6 Statement of Changes in Net Assets Available for Plan Benefits for the year ended July 31, 1997 7 Notes to Financial Statements 8-12 Supplemental Schedules: Schedules of Assets Held for Investment Purposes - July 31, 1997 and 1996 13-14 Consent of Independent Public Accountants 15 4 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Plan Administrator SL Industries, Inc. Savings and Pension Plan: We have audited the accompanying statements of net assets available for plan benefits of the SL Industries, Inc. Savings and Pension Plan as of July 31, 1997 and 1996 and the related statement of changes in net assets available for plan benefits for the year ended July 31, 1997. These financial statements and the schedules referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits as of July 31, 1997 and 1996 and the changes in net assets available for plan benefits for the year ended July 31, 1997 in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the accompanying index are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund Information in the statements of net assets available for the plan benefits and the statement of changes in net assets available for plan benefits are presented for purposes of additional analysis rather than to present the net assets available for plan benefits and change in net assets available for plan benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic statements taken as a whole. ARTHUR ANDERSEN LLP Philadelphia, Pa., January 16, 1998 5 SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS July 31, 1997 SL Industries, Index Diversified Inc. Stable Value Balanced Stock Stock Common Fund Fund Fund Fund Stock ----------- ----------- ----------- ----------- ----------- NET ASSETS Investments $ 4,671,241 $ 1,073,095 $ 1,097,946 $ 1,899,622 $ 2,501,716 Participant loans receivable -- -- -- -- -- Pending transfers (138,397) 29,262 40,688 53,700 14,747 Participant contribution receivable 21,799 10,839 15,029 18,244 17,025 ----------- ----------- ----------- ----------- ----------- TOTAL NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 4,554,643 $ 1,113,196 $ 1,153,663 $ 1,971,566 $ 2,533,488 =========== =========== =========== =========== =========== Loans to Participants Combined ----------- ----------- NET ASSETS Investments $ -- $11,243,620 Participant loans receivable 262,755 262,755 Pending transfers -- -- Participant contribution receivable -- 82,936 ----------- ----------- TOTAL NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 262,755 $11,589,311 =========== =========== NOTE: The accompanying notes are an integral part of this financial statement. 6 SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS July 31, 1996 SL Industries, Index Diversified Inc. Stable Value Balanced Stock Stock Common Fund Fund Fund Fund Stock ---------- ---------- ---------- ---------- ---------- NET ASSETS Investments $3,954,508 $ 882,270 $ 603,669 $1,203,910 $1,866,532 Participant loans receivable -- -- -- -- -- Contributions receivable: Employer 89,287 32,787 23,002 40,517 16,130 Participants 22,183 9,522 7,006 10,783 14,159 ---------- ---------- ---------- ---------- ---------- TOTAL NET ASSETS AVAILABLE FOR PLAN BENEFITS $4,065,978 $ 924,579 $ 633,677 $1,255,210 $1,896,821 ========== ========== ========== ========== ========== Loans to Participants Combined ---------- ---------- NET ASSETS Investments $ -- $8,510,889 Participant loans receivable 321,955 321,955 Contributions receivable: Employer -- 201,723 Participants -- 63,653 ---------- ---------- TOTAL NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 321,955 $9,098,220 ========== ========== NOTE: The accompanying notes are an integral part of this financial statement. 7 SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE YEAR ENDING JULY 31, 1997 SL Industries, Index Diversified Inc. Stable Value Balanced Stock Stock Common Fund Fund Fund Fund Stock ----------- ----------- ----------- ----------- ----------- ADDITIONS: Interest and dividend income $ 273,463 $ 47,005 $ 22,543 $ 43,603 $ 17,209 Contributions: Employer 81,017 29,262 40,688 53,700 167,960 Participant 245,996 126,483 154,721 194,999 62,679 Net appreciation of investments -- 169,604 321,001 536,860 424,529 Loan repayments 90,810 34,433 13,409 63,851 10,353 Transfers 102,391 (165,658) 72,002 (59,978) 51,243 ----------- ----------- ----------- ----------- ----------- TOTAL ADDITIONS 793,677 241,129 624,364 833,035 733,973 ----------- ----------- ----------- ----------- ----------- DEDUCTIONS: Retirement benefits, administrative and termination costs, etc. 233,331 30,830 85,019 96,038 90,706 Loans to participants 71,681 21,682 19,359 20,641 6,600 ----------- ----------- ----------- ----------- ----------- TOTAL DEDUCTIONS 305,012 52,512 104,378 116,679 97,306 ----------- ----------- ----------- ----------- ----------- Net additions (deductions) in net assets available for plan benefits 488,665 188,617 519,986 716,356 636,667 Net assets available for plan benefits at beginning of year 4,065,978 924,579 633,677 1,255,210 1,896,821 ----------- ----------- ----------- ----------- ----------- Net assets available for plan benefits at end of year $ 4,554,643 $ 1,113,196 $ 1,153,663 $ 1,971,566 $ 2,533,488 =========== =========== =========== =========== =========== Loans to Participants Combined ----------- ----------- ADDITIONS: Interest and dividend income $ -- $ 403,823 Contributions: Employer -- 372,627 Participant -- 784,878 Net appreciation of investments -- 1,451,994 Loan repayments (212,856) -- Transfers -- -- ----------- ----------- TOTAL ADDITIONS (212,856) 3,013,322 ----------- ----------- DEDUCTIONS: Retirement benefits, administrative and termination costs, etc. (13,693) 522,231 Loans to participants (139,963) -- ----------- ----------- TOTAL DEDUCTIONS (153,656) 522,231 ----------- ----------- Net additions (deductions) in net assets available for plan benefits (59,200) 2,491,091 Net assets available for plan benefits at beginning of year 321,955 9,098,220 ----------- ----------- Net assets available for plan benefits at end of year $ 262,755 $11,589,311 =========== =========== NOTE: The accompanying notes are an integral part of this financial statement. 8 SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN NOTES TO FINANCIAL STATEMENTS 1. Description of Plan and Summary of Significant Accounting Policies Description of Plan: SL Industries, Inc. Savings and Pension Plan (the "Plan"), originally adopted May 1, 1976, is a defined contribution savings and pension plan covering substantially all U.S. non-union employees of SL Industries, Inc. who have completed one year of service. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Participants should refer to the Summary Plan Description for more complete information with respect to the provisions of the Plan. Investments: As part of the Plan provisions, participants may invest in SL Industries, Inc. Common Stock ("Common Stock") and/or in various combinations of four funds: Stable Value Fund, Balanced Fund, Indexed Stock Fund, and Diversified Stock Fund. All income, gains or other amounts from any investment are reinvested in the same investment from which they are received. The amounts are then allocated, as appropriate, to each Participant's account balance. The Stable Value Fund represents deposit contracts with John Hancock Mutual Life Insurance Company. Contributions are maintained in a pooled account. The account is credited with earnings on the underlying investments at rates guaranteed by the contracts and charged for Plan withdrawals. The financial statements reflect the contract value as reported by John Hancock as of the Plan year-end. The remaining funds are all John Hancock separate investment accounts and are carried at market value as reported by John Hancock as of the Plan year-end. The fair value of the SL Industries, Inc. Common Stock is based on the market price as quoted on the New York Stock Exchange. The Plan presents in the statement of changes in net assets the net appreciation in investments which consists of the realized gains or losses and the unrealized appreciation or depreciation of those investments. 9 Interest and dividend income are recorded as earned on an accrual basis. Contributions: Elective Contributions: Employees' contributions are based upon authorized payroll withholdings. Participants may make elective deferrals of up to 20% of their annual base compensation. Matching Employer Contributions: The employer's match is twenty-five percent (25%) of the participant's elective deferrals, not to exceed two percent (2%) of participant's compensation. Matching employer contributions are invested solely in Common Stock of SL Industries, Inc. Profit Sharing Contributions: A profit sharing contribution is made annually to all Plan participants who have a credited year of service during the Plan year and is equal to two percent (2%) of the participant's W-2 wages, up to a maximum of $150,000, for the previous calendar year. This is a discretionary contribution determined by resolution of the Board of Directors. Profit sharing contributions are invested in accordance with the election of each participant. Benefits: At the time of separation, the vested portion of a participant's account represents the participant's accumulated benefit. At the end of a break in service year, as defined under the Plan, a participant may elect to: (1) continue to invest their accumulated benefit in the Plan until their normal retirement date at which time the value of their account will be utilized to purchase an annuity; (2) receive payment in one lump sum; or (3) to have any portion paid directly to an eligible retirement plan specified by the distributee in a direct rollover. At the normal retirement date, age 65, a participant may elect to receive their retirement benefit in one lump sum payment, in various types of installments, or in the form of a qualified joint and survivor annuity. The amount of benefit payment depends on the value of the participant's 10 account and the retirement benefit option the participant elects. Vesting: Participants become immediately vested in their elective deferral contributions plus actual earnings and their employer's profit sharing contributions. Employer matching contributions become vested as follows: Percentage Years of Service Vested ---------------- ------ Five years or more 100% Four years or more, but less than five years 75% Three years or more, but less than four years 50% Less than three years 0% In determining years of service for vesting, the Plan considers service from the participant's date of hire. The nonvested portion of a participant's account, if any, will be forfeited after a one year break in service. Forfeitures will be allocated to the remaining participants' accounts on a prorata basis as defined by the Plan. Participant Loans: The Plan makes loans to a participant, using the participant's account balance as collateral. The minimum loan amount is $500 and may not exceed the lesser of $50,000 or 50% of the participant's vested account balance. All loans bear interest at prime rate plus one percent compiled as of the loan origination date. Loans are repayable over a twelve to sixty month term. The interest rates on the participant loans receivable on the accompanying statements of net assets available for plan benefits for July 31, 1997 and 1996 range from 9.25% to 9.50%. 11 Voting Rights: Effective August 1, 1992, the Plan was amended to provide participants with certain voting and other rights in connection with SL Industries, Inc. Common Stock held in their accounts under the Plan. 2. Plan Termination While SL Industries, Inc. has not expressed any intent to do so, it may terminate the Plan at any time, subject to the penalties set forth in ERISA, as amended. In the event of such Plan termination, participants will become 100% vested in their accounts. 3. Reconciliation to Form 5500 As of July 31, 1997 and 1996, the Plan had approximately $475,000 and $158,000, respectively, of pending distributions to participants who elected to withdraw from the Plan. These amounts are recorded as a liability in the Plan's Form 5500; however, these amounts are not recorded as a liability in the accompanying statements of net assets available for plan benefits in accordance with generally accepted accounting principles. The following table reconciles net assets available for Plan benefits per the financial statements to the Form 5500 as filed by the Company for the years ended July 31, 1997 and 1996: Net Assets Available for Plan Benefits ----------------- Benefits Payable to Benefits July 31, July 31, Participant Paid 1997 1996 -------- -------- ----------- ---------- Per financial statements $ 0 $541,000 $11,589,000 $9,098,000 Accrued benefit payments 475,000 475,000 (475,000) (158,000) Reversal of 1996 accrual for benefit payments 0 (158,000) 0 0 -------- -------- ----------- ---------- Per Form 5500 $475,000 $858,000 $11,114,000 $8,940,000 ======== ======== =========== ========== 12 4. Administrative Expenses Administrative expenses of the Plan are paid by SL Industries, Inc., with the exception of asset management fees related to certain deposit contracts held with the insurance company which are paid by the Plan. Total asset management fees expensed in fiscal 1997 and 1996 were $1,178 and $2,290, respectively. 5. Tax Status The Internal Revenue Service has issued a ruling that the Plan meets the requirements for qualification pursuant to Section 401(a) of the Internal Revenue Code (the "Code") and that the Plan is exempt from federal income taxes under Section 501(a) of the Code. Management believes they are operating the Plan in accordance with the Code. Accordingly, there is no provision for income taxes in the accompanying financial statements. 13 SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES FORM 5500 ITEM 27(a) JULY 31, 1997 A. Party in Interest B. Identity of Issuer C. Description of Asset D. Cost E. Current Value - ----------- --------------------- ----------------------- ------- ---------------- * SL Industries, Inc. Common Stock $1,339,341 $2,501,716 * John Hancock Mutual Guaranteed Investment Contracts $4,671,241 $4,671,241 Life Insurance Company (#6315, #7494, #7960, #8583 and #9543) * John Hancock Mutual Common Trust Fund - Balanced Fund $860,308 $1,073,095 Life Insurance Company * John Hancock Mutual Common Trust Fund - Indexed Stock Fund $668,205 $1,097,946 Life Insurance Company * John Hancock Mutual Common Trust Fund - Diversified Stock Fund $1,426,318 $1,899,622 Life Insurance Company * John Hancock Mutual Loans Receivable $262,755 $262,755 Life Insurance Company (interest ranges from 9.25% to 9.50%) * Indicates party known to be a party in interest. 14 SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES FORM 5500 ITEM 27(a) JULY 31, 1996 A. Party in Interest B. Identity of Issuer C. Description of Asset D. Cost E. Current Value - ------------ --------------------- ----------------------- ------- ---------------- * SL Industries, Inc. Common Stock $1,115,576 $1,866,532 * John Hancock Mutual Guaranteed Investment Contracts $3,954,508 $3,954,508 Life Insurance Company (#6315, #7494, #7960 and #8583) * John Hancock Mutual Common Trust Fund - Balanced Fund $728,393 $882,270 Life Insurance Company * John Hancock Mutual Common Trust Fund - Indexed Stock Fund $397,011 $603,669 Life Insurance Company * John Hancock Mutual Common Trust Fund - Diversified Stock Fund $1,011,034 $1,203,910 Life Insurance Company * John Hancock Mutual Loans Receivable $321,955 $321,955 Life Insurance Company (interest ranges from 9.25% to 9.50%) * Indicates party known to be a party in interest. 15 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report dated January 16, 1998, included in this Form 10-K/A for the year ended July 31, 1997 into the company's previously filed Registration Statement No. 33-31805 on Form S-8. ARTHUR ANDERSEN LLP Philadelphia, PA January 27, 1998