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SL Industries Second Quarter Results, 2006August 8, 2006 SL Industries, Inc. Announces Financial Results for Its Second Quarter Ended June 30, 2006 MT. LAUREL, N.J.--(BUSINESS WIRE)--Aug. 8, 2006--SL INDUSTRIES, INC. (AMEX & PHLX:SLI) announced today that net sales for the second quarter ended June 30, 2006 were $43,114,000, compared to $31,259,000 for the second quarter last year, an increase of $11,855,000, or 38%. Net income from continuing operations was $2,107,000, or $0.36 per diluted share, compared to net income from continuing operations of $1,358,000, or $0.24 per diluted share, for the same period in 2005. Second quarter results include the financial performance of Ault Incorporated ("Ault"), which was acquired on January 26, 2006. Net sales of Ault for the second quarter were $12,324,000, with income from operations of $1,606,000. Net sales from continuing operations for the six months ended June 30, 2006 were $82,399,000, compared to net sales of $63,715,000 for the six months ended June 30, 2005, an increase of $18,684,000, or 29%. Net income from continuing operations for the six months ended June 30, 2006 was $3,340,000, or $0.58 per diluted share, compared to net income from continuing operations of $3,327,000, or $0.58 per diluted share, for the same period last year. Net sales of Ault for the six month period ended June 30, 2006 were $20,929,000, with income from operations of $1,983,000. Loss from discontinued operations was $297,000 for the first six months of 2006, compared to a loss from discontinued operations of $301,000 for the same period last year. As a result, for the six-month period ended June 30, 2006, the Company recorded net income of $3,043,000, or $0.52 per diluted share, compared to net income of $3,026,000, or $0.53 per diluted share, for the same period last year. Results for the Company's four business segments were mixed over the first six months of 2006. SL Power Electronics Corp. (which was created through the consolidation of Condor D.C. Power Supplies, Inc. and Ault) recorded net sales of $41,162,000 and operating income of $3,343,000, as compared to net sales of $22,384,000 and operating income of $2,428,000 for the same period in 2005. The results of SL Power Electronics Corp. includes the results of Ault from the acquisition date of January 26, 2006. Teal Electronics Corp. recorded net sales of $17,792,000 and operating income of $2,835,000, as compared to net sales of $15,237,000 and operating income of $2,135,000 for the same period last year. SL Montevideo Technology, Inc. recorded net sales of $12,688,000 and operating income of $501,000, as compared to net sales of $13,680,000 and operating income of $1,824,000 for the first six months of 2005. RFL Electronics Inc. recorded net sales of $10,757,000 and operating income of $710,000, as compared to net sales of $12,414,000 and operating income of $1,316,000 for the same period last year. Engineering and product development expenses for the first six months of 2006 increased by $1,453,000, or approximately 30%, as compared to the same period last year. The acquisition of Ault accounted for $1,300,000 of the increased engineering expenses. SL-MTI also recorded an increase of $217,000, or 19%, attributable to increased ongoing development jobs and decreased customer funded programs. The Company reported net new orders of $49.2 million in the second quarter of 2006, compared to net new orders of $32.4 million in the second quarter of 2005. Backlog at June 30, 2006 was $58.0 million, as compared to $42.7 million a year earlier. Commenting on the results, James Taylor, President and Chief Executive Officer of SL Industries, said, "In general, the Company's business segments rebounded nicely after a difficult first quarter. Increased sales at the Company's Power Electronics Group, comprised of SL Power Electronics Corp. and Teal Electronics Corp., were driven by strong demand from semiconductor and medical equipment manufacturers. Margins at SL Power Electronics Corp. declined as a result of the acquisition of Ault and are expected to steadily improve as the business is fully consolidated." Taylor added, "This quarter we introduced the SL Power Electronics Corp., which was formed by the consolidation of Condor D.C. Power Supplies, Inc. and Ault Incorporated. This new power electronics company operates out of seven locations in four countries. It has been very well received by our customers, who increasingly require global sourcing capabilities. With its global infrastructure established, SL Power Electronics Corp. intends to further penetrate international markets, with plans underway to expand its presence in the People's Republic of China and to open a new sales office in Germany in the third quarter." "The one exception to the Company's quarter-to-quarter improvement was attributable to the performance of SL Montevideo Technology, Inc., the Company's motion controls division. The continued deferral of defense-related aerospace orders decreased sales volume and caused manufacturing inefficiencies at SL-MTI. Although the number of programs under development in both the defense and commercial aerospace markets are increasing, lower order volumes required that the division lay-off 82 employees in the second quarter. The layoffs entailed separation payments of $182,000 during the period. We expect sales to increase slowly for the remainder of the year and are taking action to further improve operations." "RFL Electronics' net sales improved in the second quarter, but have been affected by weak bookings for its carrier communications product line. In addition, a number of anticipated utility system upgrades have been postponed in North America. We expect improved results at RFL for the second half, as a result of the growing market acceptance of several new products and the increasing need for capital investment in the nation's electric utility transmission infrastructure." Taylor continued, "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 $2,356,000 for the six-month period ended June 30, 2006, as compared to $2,876,000 for the same period in 2005. Corporate expenses decreased to 3% of net sales for the six months ended June 30, 2005, as compared to 5% of net sales for the same period last year." Taylor concluded, "On May 17, the Company held its Annual Shareholders Meeting, at which time shareholders re-elected all of the directors standing for re-election by margins exceeding 90%. On behalf of the entire Board of Directors, we thank our shareholders for their continued support." 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.
Contact: SL Industries, Inc. Source: SL Industries, Inc.
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