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SL Industries Annual and Fourth Quarter Results, 2004March 24 , 2005 SL Industries Announces 2004 Fourth Quarter and Year-End Results MT. LAUREL, N.J.--(BUSINESS WIRE)--March 24, 2005--SL INDUSTRIES, INC. (AMEX & PHLX:SLI) announced today that its net income for the year ended December 31, 2004 was $8,672,000, or $1.48 per diluted share. Net income for the year included income from discontinued operations, after tax, of $2,371,000, or $.40 per diluted share. Net income for the year from continuing operations was $6,301,000, or $1.08 per diluted share. Income from continuing operations benefited by approximately $1,295,000, or $.22 per diluted share, due to current and prior years research and development tax credits recorded during the year. Discontinued operations include the businesses of three former subsidiaries of the Company: SL Waber, Inc., which was sold in September 2001; Elektro-Metall Export GmbH, which was sold in January 2003 (this sale was recorded in 2002); and SL Surface Technologies, Inc., which was sold in November 2003. For the year ended December 31, 2003, net income was $1,320,000, or $.22 per diluted share. The net income for 2003 included a loss from discontinued operations of $2,422,000, or $.41 per diluted share. Net income from continuing operations for 2003 was $3,742,000, or $.63 per diluted share. Net sales from continuing operations for 2004 was $118,804,000, compared with net sales from continuing operations for 2003 of $105,284,000. Generally, the Company's operating segments recorded improved results, as compared to 2003. The one exception was RFL Electronics, which continued to experience decreases in sales of teleprotection and protective relaying equipment, as electric utilities deferred significant capital improvement programs for the second year in a row. In 2004, RFL Electronics recorded net sales of $22,585,000, with income from operations of $2,091,000, compared with net sales of $23,388,000 and income from operations of $2,236,000 for 2003. The Power Electronics Group performed well: in 2004, Condor D.C. Power Supplies recorded net sales of $41,457,000 with income from operations of $3,789,000, compared with net sales of $39,450,000 and income from operations of $3,377,000 for 2003; and Teal Electronics recorded net sales of $30,265,000, with income from operations of $4,635,000, compared with net sales of $20,393,000 and income from operations of $2,671,000 for 2003. SL Montevideo Technologies recorded in 2004 net sales of $24,497,000, with income from operations of $2,827,000, compared with net sales of $22,053,000 and income from operations of $1,957,000 for 2003. For the three months ended December 31, 2004, net income was $1,400,000, or $.25 per diluted share. Net loss from discontinued operations for the period was $103,000, or $.02 per diluted share. Net income from continuing operations for the period was $1,503,000, or $.27 per diluted share. For the three months ended December 31, 2003, net income was $280,000, or $.05 per diluted share. Net loss from discontinued operations for the period was $1,003,000, or $.17 per diluted share. Net income from continuing operations for the period was $1,283,000, or $.22 per diluted share. Net sales from continuing operations for the three months ended December 31, 2004 were $30,745,000, compared with net sales from continuing operations of $26,404,000 for the same period last year. Warren Lichtenstein, Chairman and Chief Executive Officer of SL Industries, commented, "SL achieved record earnings of $1.48 per share in 2004. These results were achieved due to our successful implementation and completion of the restructuring plan we announced three years ago, which refocused the Company's efforts on its core businesses. Additionally, the Company resolved its long-standing patent infringement dispute with American Power Conversion, for which it received $2,516,000, net of taxes. At year-end, SL common stock closed at $14.15 per share, a 76% increase from the prior year end closing stock price." "In 2004, the Company strengthened its financial position and reinvested in its business segments. Major new product introductions were launched at all of our divisions: Condor D.C. Power Supplies released 35 new high-density power supply models; Teal Electronics began marketing its innovative power monitor equipment; SL Montevideo Technology introduced several new motor designs with oil field service, automotive and medical applications; and RFL Electronics completed development of a portfolio of new transmission line relay protection and carrier communications products. Engineering and product development expenses were $8,951,000 for the year, an increase of approximately $1,095,000, or 14%, from 2003." "All of the operating subsidiaries generated positive cash flows from operations and recorded strong returns on invested capital. As of today, the Company maintains a cash balance of $3,993,077, with outstanding bank debt of $1,874,686." Lichtenstein continued, "The Company also used its financial strength to improve its capital structure. SL acquired 545,900 shares of its common stock, in open market purchases and negotiated transactions pursuant to its stock repurchase program. These repurchases reduced the outstanding shares of the Company's common stock by approximately 9%. The aggregate purchase price for these repurchases was $6,076,000, or an average price of $11.13 per share." "We also continued to increase the productivity and the capabilities of our corporate administration. Corporate expenses increased to $5,033,000, or approximately 4.2% of sales, from $3,563,000, or approximately 3.4% of sales in 2003. However, these expenses include the addition of the Company's chief operating officer to the corporate staff, whose compensation had previously been charged to operating subsidiaries. Without this charge, corporate expenses would have increased to $4,215,000, or approximately 3.5% of sales, from the prior year. During 2004, the Company hired a new tax manager and financial analyst and added a full time internal auditor and Sarbanes Oxley compliance officer. In addition to executive management and administration, corporate expenses include legacy obligations relating to litigation expenses, retirement liabilities and public reporting costs." Lichtenstein concluded, "Having achieved the goals set forth in our business plan, SL is looking towards the future. In December, the Board of Directors approved a new three-year strategic plan, which calls for accelerated growth through the penetration of attractive new market niches, further improvement of operations and expansion of global capabilities. We expect to achieve these goals through organic growth and strategic acquisitions. We look forward to further improving the Company's performance in the year ahead, and reporting on our progress to our shareholders." (table attached) SL INDUSTRIES, INC. December 31, December 31, ASSETS Property, plant and equipment, net 8,509 9,547 LIABILITIES & SHAREHOLDERS' EQUITY Long term debt, less portion due within one SL INDUSTRIES, INC. Three-Months Ended Twelve-Months Ended Net sales $30,745 $26,404 $118,804 $105,284 Cost and expenses: Income from operations 2,156 2,180 8,309 6,678 Income from continuing Income tax provision 421 801 1,316 2,281 Basic net income (loss) per Diluted net income (loss) per Shares used in computing basic (a) Reclassified for comparative purposes only. About SL Industries, Inc. SL Industries, Inc. designs, manufactures and markets equipment and systems for industrial, medical, electric utility, aerospace and telecommunications applications. For more information about SL Industries, Inc. and its products, please visit the Company's website 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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