(Source: Business Wire)
SL INDUSTRIES, INC. (NYSE AMEX:SLI) announced today that revenue for the first quarter ended March 31, 2009 was $36,232,000, compared to $45,361,000 for the first quarter last year. Income from continuing operations was $245,000, or $0.04 per diluted share, compared to income from continuing operations of $1,346,000, or $0.23 per diluted share, for the same period in 2008. In addition, loss from discontinued operations was $196,000 for the first quarter of 2009, compared to a loss from discontinued operations of $212,000 for the same period last year. As a result, for the period ended March 31, 2009, the Company recorded net income of $49,000, or $0.01 per diluted share, compared to net income of $1,134,000, or $0.19 per diluted share, for the same period last year.
The Company reported net new orders of $42,615,000 for the first quarter of 2009, compared to net new orders of $53,189,000 in the first quarter of 2008. Backlog at March 31, 2009 was $55.8 million, as compared to $61.3 million a year earlier.
Commenting on the results, James Taylor, President and Chief Executive Officer of SL Industries, said, "The global economic slowdown did not improve in the first quarter, which impacted the Company's revenue and financial performance. With little visibility in the marketplace, businesses have suspended and postponed capital investment. Net sales decreased 20% from the first quarter of 2008. In response we took early action to further decrease the Company's cost structure, reducing factory work time and operating expenses, and to carefully manage current assets. These savings have been effected without sacrificing new product development programs at any of the Company's business units."
Taylor continued, "The most significant sales decline was experienced by the Power Electronics Group, which consists of SL Power Electronics Corp., Teal Electronics and MTE Corporation. Sales decreased 23% from the first quarter of 2008 and 22% from the fourth quarter of 2008. Order activity in all of its served markets remains at depressed levels. The Company's cost reduction efforts and productivity improvements, as well as lower commodity prices, have enabled the Power Electronics Group to maintain gross margin during this period."
"Engineering and product development efforts have not been reduced. We have seen some market stabilization over the past several weeks. The book-to-bill ratio at both SLPE and Teal has improved to 1.18, as customer inventories have been drawn down to very low levels. In addition, the Power Electronics Group continues to work on a very large number of new customer programs."
Taylor added, "SL Montevideo Technology was also impacted by lower demand from its customers, particularly in the defense and commercial aerospace markets. Again, we were able to maintain gross margin as a result of cost cutting measures and productivity improvements."
"RFL Electronics reported relatively consistent results for the first quarter, as its business is less sensitive to general economic activity. RFL has actually experienced an increase in the number of bid requests over the past quarter, although it is impossible to know the timing of these programs. Period activity was largely comprised of smaller aftermarket orders."
Taylor stated, "On the whole, management's objective has been to prudently manage the Company's operations during this severe economic downturn. Capacity and overhead expenses have been reduced to better align costs with business levels. This has enabled the Company to maintain its gross margin despite the unabsorbed overhead costs associated with lower volume. Cash flow remains positive and the Company currently maintains a cash balance of approximately $2 million with no bank debt. At the same time, we continue to move forward on the strategic initiatives necessary to ensure the Company's growth when the market rebounds. We believe the Company is in a strong competitive position to take advantage of market opportunities when they arise."
"Notwithstanding the Company's strong strategic position, we are aware that our shareholders rely on us to take the actions necessary to deliver superior returns, whatever the economic climate. For that reason, the Board of Directors is undertaking a review of strategic alternatives to determine the best course to maximize shareholder value."
Taylor concluded, "As previously announced, the Board of Directors has established June 3, 2009 as the date of the Annual Shareholders Meeting for shareholders of record on April 29, 2009. The meeting will be held at the offices of Olshan Grundman Frome Rosenzweig & Wolosky LLP, 65 East 55th Street, New York, New York at 10:00 A.M., Eastern Time.
