SL Industries, Inc. Announces Financial Results for Its Second Quarter Ended June 30, 2003
MT. LAUREL, N.J.--Aug. 14, 2003--SL INDUSTRIES, INC. (AMEX & PHLX:SLI) announced today that revenue for the second quarter ended June 30, 2003 was $27,444,000, compared to $27,924,000 for the second quarter last year, a decrease of $480,000, or 1.7%. Net income from continuing operations was $699,000, or $0.12 per diluted share, compared to net income of $117,000, or $0.02 per diluted share, for the same period in 2002. Discontinued operations added net income of $214,000, or $0.04 per diluted share, in 2002 for a total net income of $331,000, or $0.06 per diluted share, in the three months ended in June 30, 2002.Net sales from continuing operations for the six months ended June 30, 2003 were $53,662,000, compared to net sales of $55,457,000 for the six months ended June 30, 2002, a decrease of $1,795,000, or 3.2%. Net income from continuing operations for the six months ended June 30, 2003 was $885,000, or $0.15 per diluted share, compared to a net loss from continuing operations of ($811,000), or ($0.14) per diluted share, for the same period last year. Discontinued operations added net income of $766,000, or $0.13 per diluted share, for a total net loss of ($45,000), or ($0.01) per diluted share, for the six month period ended June 30, 2002. During the six month period ended June 30, 2002, the Company incurred special charges of $1,834,000 (change-in-control payments and proxy cost) and restructuring charges of $265,000. No such charges were incurred during the six month period ended June 30, 2003.
Results for the first six months of 2003 of each of the Company's four business segments were mixed. The Power Electronics Group, comprised of Condor D.C. Power Supplies, Inc. and Teal Electronics Corp., recorded net sales of $29,465,000 and operating income of $2,705,000, as compared to net sales of $26,286,000 and operating income of $962,000 for the same period last year. SL Montevideo Technologies, Inc. recorded net sales of $11,129,000 and operating income of $806,000, as compared to net sales of $11,950,000 and operating income of $940,000 for the first six months of 2002. RFL Electronics Inc. recorded net sales of $12,043,000 and operating income of $1,150,000, as compared to net sales of $16,033,000 and operating income of $2,213,000 for the same period last year. And SL Surface Technologies, Inc. recorded net sales of $1,025,000 and a loss from operations of ($256,000), as compared to net sales of $1,188,000 and a loss from operations of ($485,000) for the first six months of last year.
Selling, general and administrative costs for the first six months of 2003 decreased by $749,000, or approximately 6%, as compared to the same period last year. During the first six months of this year, the Company incurred approximately $580,000 in costs with respect to the defense of a class action complaint related to environmental matters. Without these defense costs, selling, general and administrative expense would have decreased $1,329,000, or 10% compared to the same six month period in 2002.
The Company reported net new orders of $24.4 million in the second quarter of 2003, compared to net new orders of $28.9 million in the second quarter of 2002. Backlog at June 30, 2003 was $37 million, as compared to $42.6 million a year earlier.
Commenting on the results, Warren Lichtenstein, Chairman and Chief Executive Officer of SL Industries, Inc. said, "Our second quarter results represent the third consecutive quarter of profitability from continuing operations. The decrease in sales was largely attributable to the power utility market, where we continue to experience the postponement and deferral of capital improvement projects. Nevertheless, improvements in productivity and working capital management allowed the Company to record increased profits and generate strong cash flows. During the first six months of 2003, bank debt was reduced by approximately $11 million, to $6.6 million."
"In 2003 the Company experienced sporadic demand in its served markets, with particular softness in the power utility industry. In addition, activity in the commercial aerospace and semiconductor industries remains at or near historic lows. Our tactical response in this economic environment has been to focus on improving operational efficiencies and to invest the cost savings to enhance product value, fund new product initiatives and increase profitability. We have been able to accomplish all these goals this year."
Lichtenstein concluded, "On May 29, 2003, the Company held its Annual Shareholders Meeting, at which time shareholders re-elected all of the directors standing for re-election and elected Mr. James Risher to fill a vacancy on the Board. Jim Risher has an outstanding record of accomplishment in the power electronics industry, including having served as the President and Chief Executive Officer of Exide Electronics Group, Inc. for 12 years. His industry experience and sound judgment will be an outstanding addition to the Board of Directors, as it moves forward to execute our strategy to maximize shareholder value."
About SL Industries, Inc.
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.slindustries.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.
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three-Months Ended Six-Months Ended
June 30, June 30,
2003 2002 (a) 2003 2002 (a)
----------- -------- ----------- --------
(unaudited) (unaudited)
Net sales $27,444 $27,924 $53,662 $55,457
Cost and expenses:
Cost of products sold 17,018 18,458 34,137 35,627
Engineering and product
development 1,996 1,646 3,914 3,644
Selling, general and
administrative 6,639 6,682 12,659 13,408
Depreciation and
amortization 635 721 1,283 1,452
Special charges - 9 - 1,834
Restructuring costs - 40 - 265
----------- -------- ----------- --------
Total cost and expenses 26,288 27,556 51,993 56,230
----------- -------- ----------- --------
Operating income (loss) from
continuing operations 1,156 368 1,669 (773)
Other income (expense):
Interest income 31 7 96 10
Interest expense (129) (376) (335) (892)
----------- -------- ----------- --------
Income (loss) from
continuing operations
before income taxes 1,058 (1) 1,430 (1,655)
Income tax provision
(benefit) 359 (118) 545 (844)
----------- -------- ----------- --------
Income (loss) from
continuing operations 699 117 885 (811)
Income from discontinued
operations (net of tax) - 214 - 766
----------- -------- ----------- --------
Net income (loss) $699 $331 $885 $(45)
=========== ======== =========== ========
Basic net income (loss) per
common share
Income (loss) from
continuing operations $0.12 $0.02 $0.15 $(0.14)
Income from discontinued
operations (net of tax) - 0.04 - 0.13
----------- -------- ----------- --------
Net income (loss) $0.12 $0.06 $0.15 $(0.01)
=========== ======== =========== ========
Diluted net income (loss)
per common share
Income (loss) from
continuing operations $0.12 $0.02 $0.15 $(0.14)
Income from discontinued
operations (net of tax) - 0.04 - 0.13
----------- -------- ----------- --------
Net income (loss) $0.12 $0.06 $0.15 $(0.01)
=========== ======== =========== ========
Shares used in computing
basic net income (loss)
per common share 5,898 5,894 5,896 5,839
Shares used in computing
diluted net income (loss)
per common share 5,912 5,930 5,912 5,839
(a) Reclassified for comparative purposes only.
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS
(in thousands)
Three-Months Six-Months
Ended Ended
June 30, 2003 June 30, 2003
2003 2002 2003 2002
------- ------ ------- -----
(unaudited) (unaudited)
Net income (loss) $699 $331 $885 $(45)
Other comprehensive income:
Currency translation adjustment, net of
related taxes - 389 - 402
------- ------ ------- -----
Comprehensive income $699 $720 $885 $357
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SL INDUSTRIES, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
2003 2002
------------- ------------
(unaudited)
Cash and cash equivalents $- $3,539
Receivables, net 17,650 18,001
Inventories 12,856 13,747
Net current assets held for sale - 22,950
Other current assets 3,014 3,347
------------- ------------
Total current assets 33,520 61,584
Property, plant and equipment, net 10,408 10,852
Intangible assets, net 11,338 11,388
Other assets 6,880 6,843
------------- ------------
Total assets $62,146 $90,667
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Long -term debt due within one year $3,756 $17,557
Other current liabilities 15,858 18,980
Net current liabilities held for sale - 14,950
Long-term debt less portion due within one
year 2,835 -
Other liabilities 4,957 5,468
Shareholders' equity 34,740 33,712
------------- ------------
Total liabilities and shareholders'
equity $62,146 $90,667
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