SL Industries Announces 2012 Full Year and Fourth Quarter Results

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SL Industries Announces 2012 Full Year and Fourth Quarter Results

MT. LAUREL, N.J.--(BUSINESS WIRE)-- SL INDUSTRIES, INC. (NYSE MKT: SLI); ("SLI" or the "Company") operating results for the fourth quarter and year ended December 31, 2012 are summarized in the following paragraphs. Please read the Company's Form 10-K, which can be found at www.slindustries.com, for a full discussion of the operating results.

Fourth Quarter Results


Net sales for the quarter ended December 31, 2012, were $51.5 million, compared with net sales for the quarter ended December 31, 2011 of $51.4 million.

Income from continuing operations for the quarter ended December 31, 2012 was $3.6 million, or $0.87 per diluted share, compared to income from continuing operations of $3.1 million, or $0.67 per diluted share, for the quarter ended December 31, 2011. Included in income from continuing operations during the fourth quarter of 2011 was $0.3 million of restructuring costs.

Net income for the quarter ended December 31, 2012 was $3.0 million, or $0.71 per diluted share, compared to a net loss of $1.7 million, or $0.37 per diluted share, for the quarter ended December 31, 2011. Net income for the quarter ended December 31, 2012 included a net loss from discontinued operations of $0.7 million, or $0.16 per diluted share, compared to a net loss from discontinued operations of $4.8 million, or $1.04 per diluted share, for the fourth quarter 2011. The loss from discontinued operations in 2012 relates to environmental remediation costs, consulting fees, legal charges and possible claims associated with the past operations of the Company's five environmental sites. In 2011, the majority of the loss in discontinued operations was related to a $5.2 million, after-tax charge, recorded in the fourth quarter, for environmental obligations related to the Company's Pennsauken site. The net loss from discontinued operations in 2011 was partially offset by a change in the estimated effective state tax rates. The change increased the benefit on losses incurred in discontinued operations.

The Company generated Adjusted EBITDA from continuing operations of $5.3 million for the fourth quarter of 2012, as compared to $5.4 million for the same period in 2011, a decrease of $0.1 million, or 3%. See "Note Regarding Use of Non-GAAP Financial Measurements" below for the definition of Adjusted EBITDA.

Full Year Results

Net sales for the year ended December 31, 2012, were $200.6 million, compared with net sales for the year ended December 31, 2011 of $212.3 million.

Income from continuing operations for the year ended December 31, 2012 was $9.4 million, or $2.16 per diluted share, compared to income from continuing operations of $12.8 million, or $2.80 per diluted share, for the year ended December 31, 2011.

Net income for the year ended December 31, 2012 was $7.8 million, or $1.80 per diluted share, compared to net income of $8.2 million, or $1.79 per diluted share, for the year ended December 31, 2011. Net income for the year ended December 31, 2012 included a net loss from discontinued operations of $1.6 million, or $0.36 per diluted share, compared to a net loss from discontinued operations of $4.6 million, or $1.01 per diluted share, for the year ended December 31, 2011. The loss from discontinued operations in 2012 relates to environmental remediation costs, consulting fees, legal charges and possible claims associated with the past operations of the Company's five environmental sites. The majority of the loss in discontinued operations for the year ended December 31, 2011 related to an after-tax charge for environmental obligations related to the Company's Pennsauken site. The loss in discontinued operations was partially offset by a $0.8 million non-cash gain from a favorable tax settlement associated with the Company's former German subsidiary, which was sold in January 2003.

The Company generated Adjusted EBITDA from continuing operations of $18.6 million for the year ended December 31, 2012, as compared to $22.2 million for the same period in 2011, a decrease of $3.6 million, or 16%. See "Note Regarding Use of Non-GAAP Financial Measurements" below for the definition of Adjusted EBITDA.

Guidance 2013

The Company anticipates, based on current information, full-year 2013 net sales, EBITDA and Adjusted EBITDA from continuing operations in the ranges of $186 million to $227 million, $16 million to $19 million and $18 million to $21 million, respectively. The Company's outlook for the first quarter of 2013 is for net sales between $45 million and $49 million, EBITDA and Adjusted EBITDA from continuing operations between $2.8 million and $3.1 million and $3.6 million to $3.9 million, respectively.

Financial Summary

  
SUMMARY CONSOLIDATED BALANCE SHEETS
 
December 31,December 31,
2012 2011
(In thousands)
 
ASSETS
Current assets:
Cash and cash equivalents$3,196$5,632
Receivables, net30,30631,141
Inventories, net22,10222,599
Other current assets 5,513  6,740
Total current assets 61,117  66,112
Property, plant and equipment, net9,5939,416
Intangible assets, net25,40525,967
Other assets and deferred charges, net 11,022  9,731
Total assets$107,137 $111,226
 
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities$34,808$31,708
Long-term liabilities21,89722,661
Shareholders' equity 50,432  56,857
Total liabilities and shareholders' equity$107,137 $111,226
 
CONSOLIDATED STATEMENTS OF INCOME
    
Three Months EndedTwelve Months Ended
December 31,December 31,
 2012   2011   2012   2011 
(In thousands, except per share amounts)
 
Net sales$51,452$51,379$200,577$212,331
Cost and expenses:
Cost of products sold35,44334,700136,542143,420
Engineering and product development2,5892,88711,74612,820
Selling, general and administrative8,0918,51835,82034,426
Depreciation and amortization6736702,7112,870
Restructuring charges 5   261   857   261 
Total cost and expenses 46,801   47,036   187,676   193,797 
Income from operations4,6514,34312,90118,534
 
Other income (expense):
Amortization of deferred financing costs(20)(33)(138)(218)
Interest income1253
Interest expense(9)(8)(48)(179)
Fire related gain000277
Other gain (loss), net 160   0   302   0 
Income from continuing operations before income taxes4,7834,30413,02218,417
Income tax provision 1,145   1,224   3,665   5,582 
Income from continuing operations3,6383,0809,35712,835
(Loss) from discontinued operations, net of tax (678)  (4,779)  (1,580)  (4,637)
Net income (loss)$2,960   ($1,699) $7,777  $8,198 
 
Basic net income (loss) per common share
Income from continuing operations$0.88$0.67$2.17$2.83
(Loss) from discontinued operations, net of tax (0.16)  (1.04)  (0.37)  (1.02)
Net income (loss)$0.72   ($0.37) $1.80  $1.81 
 
Diluted net income (loss) per common share
Income from continuing operations$0.87$0.67$2.16$2.80
(Loss) from discontinued operations, net of tax (0.16)  (1.04)  (0.36)  (1.01)
Net income (loss)$0.71   ($0.37) $1.80  $1.79 
 

Shares used in computing basic net income (loss) per common share

4,1304,5684,3134,535

Shares used in computing diluted net income (loss) per common share

4,1524,5864,3304,573
 
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 
Three Months EndedTwelve Months Ended
December 31,December 31,
 2012   2011   2012   2011 
(In thousands)
 
Net income (loss)$2,960($1,699)$7,777$8,198
Other comprehensive income, net of tax:
Foreign currency translation (37)  (210)  (103)  (262)
Comprehensive income (loss)$2,923   ($1,909) $7,674  $7,936 
 

Segment Results

  
 
Three Months EndedTwelve Months Ended
December 31,December 31,
 2012   2011   2012   2011 
(In thousands)
Net sales  
SLPE$19,508$22,446$77,869$91,066
High Power Group18,19214,08465,28363,027
SL-MTI8,0578,49736,22335,413
RFL 5,695   6,352   21,202   22,825 
Net sales 51,452   51,379   200,577   212,331 
 
Income from operations
SLPE1,0751,5012,4877,825
High Power Group2,3731,3566,8226,940
SL-MTI1,2731,6076,2926,219
RFL9741,2172,7633,189
Unallocated Corporate Expenses (1,044)  (1,338)  (5,463)  (5,639)
Income from operations 4,651   4,343   12,901   18,534 
 
Other income (expense):
Amortization of deferred financing costs(20)(33)(138)(218)
Interest income1253
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