(Source: Business Wire)
SL INDUSTRIES, INC. (NYSE AMEX:SLI) announced today that net sales for the second quarter ended June 30, 2009 were $34,956,000, compared to $48,734,000 for the second quarter last year. Loss from continuing operations was $347,000, or $0.06 per diluted share, compared to income from continuing operations of $1,999,000, or $0.34 per diluted share, for the same period in 2008. Included in the Company's second quarter results were restructuring charges of $534,000, which related to severance costs necessary to downsize staff and overhead expenses in line with current business levels. Not including these non-recurring charges, the Company would have recorded a loss from continuing operations of $20,000, or less than $0.01 per diluted share.
Net sales from continuing operations for the six months ended June 30, 2009 were $71,188,000, compared to net sales of $94,096,000 for the six months ended June 30, 2008. Loss from continuing operations for the six months ended June 30, 2009 was $102,000, or $0.02 per diluted share, compared to income from continuing operations of $3,346,000, or $0.56 per diluted share, for the same period last year. Included in the Company's first half results were restructuring charges of $534,000, which related to severance costs necessary to downsize staff and overhead expenses, as mentioned above. Not including these extraordinary charges, the Company would have recorded income from continuing operations of $225,000, or $0.04 per diluted share.
Loss from discontinued operations, net of tax, was $283,000 for the first six months of 2009, compared to a loss from discontinued operations, net of tax, of $453,000 for the same period last year. As a result, for the six-month period ended June 30, 2009, the Company recorded net loss of $385,000, or $0.06 per diluted share, compared to net income of $2,893,000, or $0.48 per diluted share, for the same period last year.
The Company's four business segments all recorded lower results for the first six months of 2009. SL Power Electronics Corp. recorded net sales of $26,314,000 and operating loss of $577,000, as compared to net sales of $39,026,000 and operating income of $1,586,000 for the same period in 2008. The High Power Group recorded net sales of $21,937,000 and operating income of $1,233,000, as compared to net sales of $29,225,000 and operating income of $2,974,000 for the same period last year. SL Montevideo Technology, Inc. recorded net sales of $13,358,000 and operating income of $1,778,000, as compared to net sales of $15,085,000 and operating income of $2,053,000 for the first six months of 2008. RFL Electronics Inc. recorded net sales of $9,579,000 and operating income of $639,000, as compared to net sales of $10,760,000 and operating income of $764,000 for the same period last year.
Engineering and product development expenses for the first six months of 2009 decreased by $774,000, or approximately 11%, as compared to the same period last year. This decrease was primarily attributable to the Power Electronics Group, which reduced facility costs, consulting expenses and agency fees.
The Company reported net new orders of $30.0 million in the second quarter of 2009, compared to net new orders of $49.7 million in the second quarter of 2008. Backlog at June 30, 2009 was $51.5 million, as compared to $61.7 million a year earlier.
Commenting on the results, James Taylor, President and Chief Executive Officer of SL Industries, said, "Business levels appeared to stabilize during the second quarter, albeit at severely depressed levels. For the past several months the Company's book-to-bill ratio has maintained parity. A sense of uncertainty regarding the economy has caused customers to reduce capital investment in all of the Company's served markets, with the exception of military programs. Bookings are 29% below prior year, and sales have decreased 24% from the first half of 2008."
"Our analysis of the market data, as well as discussions with industry sources, confirm that the extremely low level of demand is widespread and is affecting customers, suppliers and competitors alike. During this period the Company has aggressively reduced its cost structure to properly align capacity with current business levels. Plans were implemented in the first quarter to decrease factory overhead and operating expenses. Additional cost cuts were effected in the second quarter. Although we are sharply cutting costs in all departments, the Company has thus far been able to avoid curtailing product development capability."
Taylor elaborated, "The Power Electronics Group (consisting of SL Power Electronics Corp., Teal Electronics Corp. and MTE Corporation) has been most impacted by the current economic downturn. Net sales have decreased 29% from the first half of 2008. In response, the Company sharply cut operating expenses and manufacturing payroll. Engineering and product development expenses have also been reduced; however, key strategic initiatives have not been delayed. These reductions have enabled the Group to improve gross margin and record an operating profit. Although demand remains depressed in all of its served markets, some targeted new programs are anticipated to increase sales from the first half."
"SL Montevideo Technology was adversely impacted by lower capital investment in the commercial aerospace and industrial markets. Sales of products intended for military programs have declined slightly. Despite an overall sales decrease of 11%, SL-MTI recorded a good operating profit as a result of early cost cutting measures and productivity improvements."
Taylor continued, "RFL Electronics also reported a decrease in business activity in the utility industry. Although demand for its products is generally less sensitive to short-term economic activity, it appears utility customers have suspended programs as they await the impact of any new federal energy legislation. While RFL has actually experienced an increase in the number of bid requests over the past six months, period activity was largely comprised of smaller maintenance orders."
Taylor added, "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 $3,140,000 for the six month period ended June 30, 2009, as compared to $2,231,000 for the same period in 2008. This increase was largely caused by non-cash compensation expenses and an insurance premium adjustment.
