Message #1 From:
Stock News Bot Date: November 9, 2005 08:09:00 AM
SLI News SL Industries, Inc. Announces Financial Results for Its Third Quarter Ended September 30, 2005
MT. LAUREL, N.J.--(BUSINESS WIRE)--Nov. 9, 2005--SL INDUSTRIES, INC. (AMEX & PHLX:SLI) announced today that net sales for the third quarter ended September 30, 2005 was $32,098,000, compared to $30,910,000 for the third quarter last year, an increase of $1,188,000, or 3.8%. Net income from continuing operations was $2,552,000, or $0.44 per diluted share, compared to net income from continuing operations of $2,554,000 or $0.43 per diluted share, for the same period in 2004. In the third quarter of 2004, net income from continuing operations benefited by approximately $1,026,000, or $0.17 per diluted share, due to research and development tax credit carry-forwards recorded during the period.
Net sales from continuing operations for the nine months ended September 30, 2005 were $95,813,000, compared to net sales of $88,059,000 for the nine months ended September 30, 2004, an increase of $7,754,000, or 8.8%. Net income from continuing operations for the nine months ended September 30, 2005 was $5,879,000, or $1.03 per diluted share, compared to net income from continuing operations of $4,799,000, or $0.80 per diluted share, for the same period last year. In 2004, net income from continuing operations benefited by approximately $1,252,000, or $0.21 per diluted share, due to research and development tax credits recorded during 2004. Net income for the nine months ended September 30, 2005 was $5,481,000, or $0.96 per diluted share, compared to net income of $7,272,000, or $1.22 per diluted share, for the same period in 2004. Included in net income for 2004 was the receipt of settlement proceeds in connection with the Company's dismissed lawsuit with American Power Conversion Corporation. The settlement proceeds were recorded in the first quarter and were reported as part of discontinued operations.
All of the Company's four business segments reported improved results from the first nine months of the prior year. Condor D.C. Power Supplies, Inc. recorded net sales of $33,001,000 and operating income of $3,260,000, as compared to net sales of $30,966,000 and operating income of $2,758,000 for the same period in 2004. Teal Electronics Corp. recorded net sales of $24,077,000 and operating income of $3,725,000, as compared to net sales of $23,194,000 and operating income of $3,719,000 for the same period last year. SL Montevideo Technologies, Inc. recorded net sales of $21,120,000 and operating income of $2,941,000, as compared to net sales of $17,381,000 and operating income of $1,846,000 for the first nine months of 2004. RFL Electronics Inc. recorded net sales of $17,615,000 and operating income of $1,862,000, as compared to net sales of $16,518,000 and operating income of $1,332,000 for the same period last year.
Engineering and product development expenses for the first nine months of 2005 increased by $204,000, or approximately 3%, as compared to the same period last year. Other than RFL Electronics, all of the Company's business segments increased their engineering and product development expenditures in 2005. RFL Electronics incurred significant costs in 2004 related to the development of several new product designs and applications.
The Company reported net new orders of $29.7 million in the third quarter of 2005, compared to net new orders of $35.6 million in the third quarter of 2004. Net new orders for the nine-month period ended September 30, 2005 decreased $4.8 million from the same period last year. Backlog at September 30, 2005 was $40.0 million, as compared to $48.5 million a year earlier.
Commenting on the results, James Taylor, Chief Executive Officer and President of SL Industries, Inc. said, "We achieved solid financial results over the first nine months of the year in all of the Company's business segments. In the Power Electronics Group, continued demand by medical equipment manufacturers drove strong year-to-date sales. Condor D.C. Power Supplies did experience some weakness in demand from industrial equipment manufacturers and electronic and electrical distributors in the third quarter, which reduced its overall rate of growth. During the quarter, however, Condor began active operations of its newly established sales subsidiary in the United Kingdom, which we believe will quickly result in significant new sales to international customers."
"Teal Electronics continued to perform at record levels over the quarter and the year, driven primarily by sales to medical equipment manufacturers. While Teal experienced mild activity in the semiconductor sector, recent reports suggest increased activity in that industry over the next several quarters. Teal is also making excellent progress to reduce its production costs, notwithstanding recent high prices for its raw materials."
Taylor continued, "SL Montevideo Technology reported strong sales, primarily into the defense-related aerospace market. However, increased demand was also reported for industrial and commercial aerospace customers. SL-MTI is in the process of expanding its production capacity and industrial design capabilities at its facility in Matamoros, Mexico, which should improve its ability to reduce costs and compete in new markets."
"After a strong first half, RFL Electronics reported reduced demand for it telecommunications products in the third quarter. In addition, a strike at one of its major customers postponed a significant program during the period. Nevertheless, RFL has done an excellent job to contain its cost structure in line with current sales activity, while continuing to improve and roll-out its extensive new line of teleprotection and carrier communications products."
"Corporate and other expenses, which relate to corporate administration, strategic management and oversight, capital financing, risk management, corporate governance and controls, legal and litigation activities and public reporting expenses were $3,619,000 for the nine months ended September 30, 2005, as compared to $3,502,000 for the same period in 2004."
Taylor concluded, "The Company also continued to improve its cash position during the year. For the nine months of the year, cash flow from operations was $6,901,000, compared to $2,905,000 for the same period in 2004. On November 7, 2005, SL's cash balance equaled $10,411,000, after paying down $2,015,000 to retire its former revolving loan facility. The Company currently has no debt under its new bank credit facility."
About SL Industries, Inc.
SL Industries, Inc. designs, manufactures and markets power electronics, power motion, power protection, teleprotection and communications equipment and systems that is used in a variety of medical, aerospace, computer, datacom, industrial, telecom, transportation and electric power utility 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.
SUMMARY CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2005 2004
-------------- --------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $6,696 $2,659
Marketable securities 485 -
Receivables, net 16,199 15,734
Inventories, net 13,823 15,839
Other current assets 3,680 3,758
-------------- --------------
Total current assets 40,883 37,990
-------------- --------------
Property, plant and equipment, net 8,494 8,509
Intangible assets, net 11,415 11,512
Other assets 5,316 5,073
-------------- --------------
Total assets $66,108 $63,084
============== ==============
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Long term debt due within one year $ - $559
Other current liabilities 16,247 17,935
-------------- --------------
Total current liabilities 16,247 18,494
-------------- --------------
Long term debt, less portion due
within one year - 1,456
Other liabilities 5,224 5,447
Shareholders' equity 44,637 37,687
-------------- --------------
Total liabilities and
shareholders' equity $66,108 $63,084
============== ==============
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
Three-Months Ended Nine-Months Ended
September 30, September 30,
2005 2004 2005 2004
--------- -------- -------- --------
Net sales $32,098 $30,910 $95,813 $88,059
Cost and expenses:
Cost of products sold 20,931 19,630 61,356 55,795
Engineering and product
development 2,294 2,284 7,071 6,867
Selling, general and
administrative 5,050 5,827 17,765 17,803
Depreciation and amortization 481 498 1,452 1,441
--------- -------- -------- --------
Total cost and expenses 28,756 28,239 87,644 81,906
--------- -------- -------- --------
Income from operations 3,342 2,671 8,169 6,153
Other income (expense):
Amortization of deferred
financing costs (236) (112) (460) (336)
Interest income 61 22 128 83
Interest expense (236) (59) (385) (207)
--------- -------- -------- --------
Income from continuing operations
before income taxes 2,931 2,522 7,452 5,693
Income tax provision (benefit) 379 (32) 1,573 894
--------- -------- -------- --------
Income from continuing operations 2,552 2,554 5,879 4,799
Income (loss) from discontinued
operations (net of tax) (98) (3) (398) 2,473
--------- -------- -------- --------
Net income $2,454 $2,551 $5,481 $7,272
========= ======== ======== ========
Basic net income (loss) per
common share
Income from continuing
operations $0.46 $0.44 $1.06 $0.82
Income (loss) from
discontinued operations (net
of tax) (0.02) 0.00 (0.07) 0.42
--------- -------- -------- --------
Net income $0.44 $0.44 $0.99 $1.24
========= ======== ======== ========
Diluted net income (loss) per
common share *
Income from continuing
operations $0.44 $0.43 $1.03 $0.80
Income (loss) from
discontinued operations (net
of tax) (0.02) 0.00 (0.07) 0.41
--------- -------- -------- --------
Net income $0.42 $0.43 $0.96 $1.22
========= ======== ======== ========
Shares used in computing basic
net income (loss)
per common share 5,580 5,801 5,528 5,873
Shares used in computing diluted
net income (loss) per common
share 5,781 5,909 5,728 5,978
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(unaudited)
Three-Months Ended Nine-Months Ended
September 30, September 30,
2005 2004 2005 2004
--------- -------- -------- --------
Net income $2,454 $2,551 $5,481 $7,272
Other comprehensive loss (net of
tax):
Unrealized loss on
securities (101) - (54) -
--------- -------- -------- --------
Comprehensive income $2,353 $2,551 $5,427 $7,272
========= ======== ======== ========
* Earnings per share does not add due to rounding.
