SL Industries Third Quarter Results, 2004

November 12, 2004

SL Industries, Inc. Announces Financial Results for Its Third Quarter Ended September 30, 2004

MT. LAUREL, N.J.--(BUSINESS WIRE)--Nov. 12, 2004--SL INDUSTRIES, INC. (AMEX & PHLX:SLI) announced today that net sales for the third quarter ended September 30, 2004 was $30,910,000, compared to $26,243,000 for the third quarter last year, an increase of $4,667,000, or 18%. Net income from continuing operations was $2,554,000, or $0.43 per diluted share, compared to net income from continuing operations of $861,000 or $0.15 per diluted share, for the same period in 2003. 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, 2004 were $88,059,000, compared to net sales of $78,880,000 for the nine months ended September 30, 2003, an increase of $9,179,000, or 12%. Net income from continuing operations for the nine months ended September 30, 2004 was $4,799,000, or $0.81 per diluted share, compared to net income from continuing operations of $2,459,000, or $0.42 per diluted share, for the same period last year. Net income from continuing operations benefited by approximately $1,266,000, or $0.21 per diluted share, due to research and development tax credit carry-forwards recorded during 2004. Net income for the nine months ended September 30, 2004 was $7,272,000, or $1.22 per diluted share, compared to net income of $1,040,000, or $0.18 per diluted share, for the same period in 2003. 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 have been reported as part of discontinued operations.

Results for the Company's four business segments varied over the first nine months of 2004, as compared to the prior year. Condor D.C. Power Supplies, Inc. recorded net sales of $30,966,000 and operating income of $2,758,000, as compared to net sales of $30,468,000 and operating income of $2,905,000 for the same period in 2003. Teal Electronics Corp. recorded net sales of $23,194,000 and operating income of $3,719,000, as compared to net sales of $14,621,000 and operating income of $1,677,000 for the same period last year. SL Montevideo Technologies, Inc. recorded net sales of $17,381,000 and operating income of $1,846,000, as compared to net sales of $16,403,000 and operating income of $1,136,000 for the first nine months of 2003. RFL Electronics Inc. recorded net sales of $16,518,000 and operating income of $1,332,000, as compared to net sales of $17,388,000 and operating income of $1,564,000 for the same period last year.

Engineering and product development expenses for the first nine months of 2004 increased by $898,000, or approximately 15%, as compared to the same period last year. Increased research and development costs were recorded at each of the Company's subsidiaries.

The Company reported net new orders of $35.6 million in the third quarter of 2004, compared to net new orders of $40.1 million in the third quarter of 2003. Net new orders for the nine-month period ended September 30, 2004 increased $16.0 million from the same period last year. Backlog at September 30, 2004 was $48.5 million, as compared to $38.6 million a year earlier.

Commenting on the results, Warren Lichtenstein, Chairman and Chief Executive Officer of SL Industries, Inc. said, "We achieved improved financial results in all of the Company's subsidiaries for the third quarter. The Power Electronics Group led this improvement with robust demand from medical and semiconductor equipment customers. In addition, Condor continues to make progress improving its gross margins from earlier in the year. Year-to-date gross margins at Condor are now equal to 2003 levels, after a difficult first quarter this year. Teal's operating margins have improved from a year earlier, primarily as a result of its increased volume."

"SL-MTI continues to see strong demand in its served markets, particularly from medical device manufacturers. Defense related aerospace bookings remain steady; although we have not yet seen any significant order increase in the commercial aerospace market. With consistently strong volume, SL-MTI has been able to maintain operating efficiencies and improved margins during the third quarter."

"RFL Electronics continued to experience sluggish demand from electric power utility customers, although market activity seemed to stabilize during the third quarter. We are still not seeing any significant demand for large capital improvement projects in the industry. As a result, it remains difficult to forecast sales for the rest of the year."

Lichtenstein 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 $3,502,000 for the nine months ended September 30, 2004, as compared to $2,728,000 for the same period in 2003. The increase of $774,000 primarily related to expenses related to stock-based compensation and the addition of the position of chief operating officer to the corporate staff."

Lichtenstein concluded, "The Company also continued to improve its cash position during the year. For the first nine months of the year, free cash flow was $9,648,000, (defined as EBITDA less capital expenditures and increases in working capital). On November 11, 2004, our cash balance equaled $4,022,000, after paying out approximately $6.1 million to repurchase shares of SL common stock."

"In September, the Company substantially completed its stock repurchase plan. 545,900 shares of SL common stock were acquired during the year for an average price per share of $11.13. As a result, the Company's outstanding shares were reduced to 5,430,276 at September 30, 2004."

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.

Source: SL Industries, Inc.