SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 6, 2003
SL INDUSTRIES, INC.
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(Exact Name of Registrant as Specified in Charter)
New Jersey 1-4987 21-0682685
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
520 Fellowship Road, Suite A114
Mount Laurel, New Jersey 08054
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(Address of Principal Executive Offices and Zip Code)
(856) 727-1500
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(Registrant's telephone number, including area code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
INTRODUCTORY NOTE:
The Purpose of this Form 8-K/A is to amend the Registrant's current Report
on Form 8-K filed with the Securities and Exchange Commission on January 17,
2003 to provide the required Unaudited Pro Forma Financial Statements to reflect
the sale of the Registrant's wholly-owned German subsidiary, Elektro-Metall
Export GmbH ("EME") and to reflect the use of the proceeds to pay current
maturities of debt.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 6, 2003 (the "Closing Date"), the Registrant sold its
wholly-owned German subsidiary, Elektro-Metall Export GmbH ("EME"), pursuant to
that certain Securities Purchase Agreement dated as of January 3, 2003 by and
among the registrant, SL Industries Vertrieb GmbH ("Seller"), DCX-Chol Holding
GmbH ("Purchaser"), DCX-Chol Enterprises, Inc. and Chol Enterprises, Inc.,
previously submitted on Form 8-K filed with the Securities and Exchange on
January 17, 2003 (the "Purchase Agreement"). As a result of the transaction,
SL Industries, Inc.'s net worth is expected to decrease by approximately $3.5
million. The transaction is not anticipated to have a material tax impact.
Description of Assets
EME is a producer of electronic actuation devices and cable harness
systems sold primarily to original equipment manufacturers in the aerospace and
automotive industries. Its operations are located in Ingolstadt, Germany and
Paks, Hungary. EME is expected to report sales of approximately $27.6 million
and net income of approximately $2.2 million for the 2002 calendar year.
Consideration
Pursuant to the terms of the Purchase Agreement, the Seller received an
aggregate consideration of $11.6 million, determined by arms-length negotiation,
comprised of cash, purchaser notes and assumption of bank debt. The purchaser
notes are comprised of a $3 million secured note that bears interest at the
prime rate plus 2% and matures no later than May 1, 2003 and a $1 million
unsecured note that bears interest at an annual rate of 12% and matures April 3,
2004. Cash proceeds were used to pay down debt.
Relationship with Purchaser
The Registrant, on the one hand, and the Purchaser and its affiliates, on
the other hand, have no common officers, directors or control persons.
For additional information, reference is made to the press release
attached to the Registrant's Current Report on Form 8-K dated January 8, 2003.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro Forma Financial Information.
Unaudited Pro Forma Consolidated Statement of Operations for the
year ended December 31, 2001
Unaudited Pro Forma Consolidated Statement of Operations for the nine
months ended September 30, 2002
Unaudited Pro Forma Consolidated Balance Sheet as of September 30,
2002
Basis of Presentation
The following unaudited pro forma consolidated financial statements
reflect the sale of SL Industries Inc.'s wholly-owned German subsidiary,
Elektro- Metall Export GmbH ("EME") after giving effect to the pro forma
adjustments described in the accompanying notes. These unaudited pro forma
consolidated financial statements have been prepared from, and should be read in
conjunction with, the historical consolidated financial statements and notes
thereto of SL Industries Inc. which are included in SL Industries' Annual Report
on Form 10-K for the year ended December 31, 2001 and Quarterly Report on Form
10-Q as of September 30, 2002 and for the nine months ended September 30, 2002.
The unaudited pro forma information is presented for illustrative
purposes only and is not necessarily indicative of the operating results or
financial position that would have occurred had the sale been consummated at the
dates indicated, nor is it necessarily indicative of future operating results or
financial position of SL Industries.
The unaudited pro forma consolidated statements of operations give
effect to the sale as if it had occurred at the beginning of the periods
presented. The unaudited pro forma consolidated balance sheet gives effect to
the sale of EME as if it occurred on September 30, 2002 and the use of proceeds
to pay current maturities of debt.
(c) Exhibits.
None
SL Industries, Inc
Pro Forma Consolidated Statement Of Operations
For The Year Ended December 31, 2001
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SL (1) Pro
Industries EME Adjustments Forma
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Net sales 138,467 25,609 112,858
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Cost of sales 96,403 18,985 77,418
Engineering & product development 8,768 795 7,973
Selling, general and administrative 28,405 2,041 26,364
Depreciation and amortization 4,587 636 3,951
Restructuring costs 3,868 0 3,868
Impairment of intangibles 4,270 0 4,270
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Total cost and expenses 146,301 22,457 123,844
Income (loss) from operations (7,834) 3,152 -- (10,986)
Other income (expense):
Interest income 366 213 228(2) 381
Interest expense (3,407) (146) 617(3) (2,644)
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Income (loss) from continuing
operations (10,875) 3,219 845 (13,249)
Income tax provision (benefit) (4,172) 251 296(4) (4,127)
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Income (loss) from continuing
operations (6,703) 2,968 549 (9,122)
Basic net income (loss) per common
share $ (1.18) $ (1.60)
Diluted net income (loss) per
common share $ (1.18) $ (1.60)
Weighted shares outstanding - basic 5,698 5,698
Weighted shares outstanding - diluted 5,698 5,698
The accompanying notes are an integral part of the Pro Forma Financial
Statements
SL Industries, Inc
Pro Forma Consolidated Statement Of Operations
For The Nine Months Ended September 30, 2002
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SL (1) Pro
Industries EME Adjustments Forma
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Net sales 101,937 19,396 82,541
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Cost of sales 67,319 14,534 52,785
Engineering & product development 6,165 586 5,579
Selling, general and administrative 22,853 2,114 20,739
Depreciation and amortization 2,655 475 2,180
Restructuring costs 265 0 265
Special charges 1,834 0 1,834
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Total cost and expenses 101,091 17,709 0 83,382
Income (loss) from operations 846 1,687 -- (841)
Other income (expense):
Interest income 171 155 158(2) 174
Interest expense (1,428) (157) 370(3) (901)
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Income (loss) from continuing
operations (411) 1,685 528 (1,568)
Income tax provision (benefit) (602) 623 185(4) (1,040)
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Income (loss) from continuing
operations 191 1,062 343 (528)
Basic net income (loss) per common
share $ 0.03 $ (0.09)
Diluted net income (loss) per
common share $ 0.03 $ (0.09)
Weighted shares outstanding - basic 5,856 5,856
Weighted shares outstanding - diluted 5,896 5,856
The accompanying notes are an integral part of the Pro Forma Financial
Statements
SL Industries, Inc
Pro Forma Consolidated Balance Sheet
30-Sep-02
(UNAUDITED)
(IN THOUSANDS)
SL (5) Pro
Industries EME Adjustments Forma
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Cash and equivalents 5,644 5,023 621
Accounts receivable, net 20,687 3,969 16,718
Notes Receivable 3,000(6) 3,000
Inventories, net 18,929 4,516 14,413
Prepaid expenses 1,116 251 (217)(9) 648
Deferred taxes 6,364 100 (478)(8) 5,786
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Total current assets 52,740 13,859 2,305 41,186
Note receivable long term 1,000(6) 1,000
Net fixed assets 18,197 6,612 11,585
Deferred taxes 2,003 40 1,963
Cash surrender value of life
insurance 962 962
Intangible assets, net 14,505 2,431 12,074
Other assets 569 786 217(9)
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Total assets 88,976 23,728 3,522 68,770
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LIABILITIES
Current liabilities:
Short-term bank debt 4,109 4,109
Long-term debt due within one year 20,149 92 (5,500)(7) 14,557
Accounts payable 5,736 537 5,199
Accrued income taxes 356 251 105
Accrued payroll and related costs 5,710 5,710
Accrued other 10,814 5,255 5,559
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Total current liabilities 46,874 10,244 (5,500) 31,130
Long-term debt less current portion 38 38
Deferred compensation 4,276 748 3,528
Other liabilities 2,952 (1,380)(8) 1,572
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Total liabilities 54,140 11,030 (6,880) 36,230
ShareHolders' Equity
Common stock 1,660 1,660
Capital in excess of par 38,763 38,763
Retained earnings 9,401 12,698 10,707(11) 7,410
Accumulated other comprehensive income 305 (305)(10)
Treasury stock at cost (15,293) (15,293)
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Total shareholders' equity 34,836 12,698 10,402 32,540
Total liabilities and
shareholders' equity 88,976 23,728 3,522 68,770
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The accompanying notes are an integral part of the Pro Forma Financial
Statements
SL Industries, Inc.
Notes to the Unaudited Pro Forma Financial Statements
(In Thousands)
1. Eliminates the results of operations of EME for the period as if the
sale had been completed as of the beginning of the periods presented.
2. Reflects the increase in interest income related to purchaser notes of
$3,000 at an interest rate of prime rate plus 2% assumed to mature four
months after the sale and a $1,000 note, which matures fifteen months
after the sale bearing an interest rate of 12% per annum.
3. Reflects the reduction in interest expense attributable to the application
of the proceeds from the sale of EME to reduce debt due within one year.
4. Reflects income tax effect of the pro forma adjustments at the U. S.
federal statutory rate of 35%.
5. Eliminates the net assets of EME as if the sale had been completed as
of the balance sheet date.
6. Reflects the receipt of purchaser notes as partial consideration for the
sale of EME. The $3,000 note has an interest rate of prime rate plus 2%
and the $1,000 note has an interest rate of 12% per annum.
7. Reflects the application of the estimated proceeds from the sale of EME
and the corresponding reduction of current maturities of long-term debt.
8. Removal of deferred tax liability related to the original purchase
accounting adjustments per FASB No. 109 and deferred tax assets.
9. Reclassified for presentation purposes.
10. Reflects the elimination of currency translation adjustments that were
associated with EME
11. Reflects the following equity adjustments:
Gross proceeds $ 8,000
Dividend from EME 2,000
Estimated transaction costs (500)
Net deferred taxes accounts 902
Translation adjustment related to EME 305
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Equity adjustment $ 10,707
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SL Industries, Inc.
Date: March 4, 2003 By: /s/ David R. Nuzzo
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David R. Nuzzo
Vice President Finance and
Administration