UNITED STATES
SECURITIES & EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2003
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-4987
SL INDUSTRIES, INC.
SAVINGS AND PENSION PLAN
520 FELLOWSHIP ROAD, SUITE A-114
MT. LAUREL, NJ 08054
(Name & address of Principal Executive Offices
of the issuer of the Securities)
21-0682685
(I.R.S. Employer Identification No.)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
SL INDUSTRIES, INC., SAVINGS AND PENSION PLAN
Plan Administrator
By: /s/ David R. Nuzzo
------------------
David R. Nuzzo
June 28, 2004
2
SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Report of Independent Public Accountants
for the year ended December 31, 2003 4
Financial Statements:
Statements of Net Assets Available for Benefits
December 31, 2003 and December 31, 2002 5
Statement of Changes in Net Assets Available for Benefits
for the year ended December 31, 2003 6
Notes to Financial Statements 7-11
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets Held for
Investment Purposes - December 31, 2003 12
Exhibit Index 13
Consent of Independent Accountants 14
3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator
SL Industries, Inc. Savings and Pension Plan
Mount Laurel, New Jersey
We have audited the accompanying statement of net assets available for benefits
of the SL Industries, Inc. Savings and Pension Plan as of December 31, 2003, and
the related statement of changes in net assets available for benefits for the
year ended December 31, 2003. These financial statements and the schedule
referred to below are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The statement of net assets available for benefits as of December 31,
2002 was audited by other auditors whose report dated June 5, 2003 expressed an
unqualified opinion on those statements.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board of the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits as of December 31,
2003 and the changes in net assets available for benefits for the year ended
December 31, 2003, in conformity with accounting principles generally accepted
in the United States of America.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedule listed in the
accompanying index is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The
supplemental schedule has been subjected to the auditing procedures applied in
our audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic statements taken as a
whole.
/s/Sobel & Co., LLC
Livingston, New Jersey
June 24, 2004
4
SL INDUSTRIES, INC.
SAVINGS AND PENSION PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
---------------------------------
2003 2002
----------- -----------
INVESTMENTS $15,887,951 $12,445,397
----------- -----------
RECEIVABLES
Employer contributions 261,851 260,967
Participant contributions 52,644 47,849
----------- -----------
TOTAL RECEIVABLES 314,495 308,816
----------- -----------
CASH 24,697 16,512
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $16,227,143 $12,770,725
=========== ===========
The accompanying notes are an integral part of these financial statements.
5
SL INDUSTRIES, INC.
SAVINGS AND PENSION PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended
December 31, 2003
-----------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
INVESTMENT INCOME:
Net appreciation in fair value of investments $2,142,771
Net realized gain on sales of investments 390,371
Interest/dividends 353,127
CONTRIBUTIONS:
Employer 536,940
Participant 859,920
Rollover 12,907
-----------
TOTAL ADDITIONS: 4,296,036
-----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits Paid to Participants 824,356
Administrative Expenses 15,262
-----------
TOTAL DEDUCTIONS 839,618
-----------
NET INCREASE 3,456,418
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of Year 12,770,725
-----------
End of Year $16,227,143
===========
The accompanying notes are an integral part of these financial statements.
6
SL INDUSTRIES, INC.
SAVINGS AND PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF PLAN
SL Industries, Inc. Savings and Pension Plan (the "Plan"), originally
adopted May 1, 1976, is a defined contribution savings and pension plan
covering substantially all U.S. non-union employees of SL Industries,
Inc.'s Corporate Office, SL Surface Technologies Inc., Condor D.C. Power
Supplies, Inc. and SL Montevideo Technology, Inc. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974, as
amended (ERISA). Participants should refer to the Summary Plan Description
for more complete information with respect to the provisions of the Plan.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
2. INVESTMENTS
As part of the Plan provisions, participants may invest in SL Industries,
Inc. Common Stock ("Common Stock") and/or in various combinations of
fourteen Fidelity Institutional Retirement Services Co., Inc. ("Fidelity")
funds: Blended Income Fund, Puritan Fund, Growth and Income Portfolio,
Low-Priced Stock Fund, Diversified International Fund, Mid-Cap Stock Fund,
Freedom Income Fund, Freedom 2000 Fund, Freedom 2010 Fund, Freedom 2020
Fund, Freedom 2030 Fund, Spartan U.S. Equity Index Fund, U.S. Bond Index
Fund and Money Market Fund. All income, gains or other amounts from any
investment are reinvested in the same investment from which they are
received. The amounts are then allocated, as appropriate, to each
participant's account balance.
The Blended Income Fund represents a deposit contract with Fidelity's
Managed Income Portfolio. Contributions are maintained in pooled accounts.
The account is credited with earnings on the underlying investments at
various rates and charged for Plan withdrawals. The financial statements
reflect the contract/market values as reported by Fidelity as of the Plan
year-end.
Employer matching contributions are invested solely in Common Stock of SL
Industries, Inc. Until a participant is fully vested, the employer
matching contribution credited to the participant's account cannot be
liquidated.
7
SL INDUSTRIES, INC.
SAVINGS AND PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
2. INVESTMENTS (continued)
The remaining funds are Fidelity separate investment accounts and are
carried at market value as reported by Fidelity as of the Plan year-end.
The fair value of the SL Industries, Inc. Common Stock is based on the
market price as quoted on the American Stock Exchange.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation in investments, which consists of the
realized gains or losses and the unrealized appreciation or depreciation
of those investments.
Interest and dividend income are recorded as earned on an accrual basis.
During 2003, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $2,533,142 as follows:
Mutual funds $1,875,366
Common stock 657,776
----------
$2,533,142
==========
The following table represents investments that represent 5% or more of
the Plan's net assets:
December 31,
2003 2002
---------- ----------
Blended Income Fund $3,654,398 $3,539,701
* SL Industries, Inc. Common Stock 2,017,062 1,238,843
Fidelity Growth and Income Portfolio 1,319,023 1,094,635
Fidelity Low Priced Stock Fund 1,856,958 1,284,594
Fidelity Mid-Cap Stock Fund 1,530,518 998,387
Spartan U.S, Equity Index Fund 1,222,176 860,151
Fidelity Freedom 2020 854,220 --
* Participant-directed and nonparticipant-directed.
8
SL INDUSTRIES, INC.
SAVINGS AND PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
2. INVESTMENTS (continued)
Information about the significant components of the changes in net assets
relating to the SL Industries, Inc. Common Stock, which is both a
participant-directed and a nonparticipant-directed investment option, is
as follows for the years ended December 31, 2003 and 2002:
December 31,
-----------------------------
Changes in net assets 2003 2002
--------- ---------
Contributions $ 342,006 $ 651,127
Dividends -- 39
Net appreciation (depreciation) 657,776 (116,739)
Benefits paid to participants (49,229) (205,900)
Transfer/loan activity (172,334) (403,606)
--------- ---------
Net changes $ 778,219 ($ 75,079)
--------- ---------
CONTRIBUTIONS
ELECTIVE CONTRIBUTIONS
Employees' contributions are based upon authorized payroll withholdings.
Participants may make elective deferrals up to an annual maximum of the
lesser of 20% of their annual compensation, as defined by the Plan, or
$12,000 in the calendar year of 2003, and thereafter as adjusted by the
Secretary of the Treasury. Additionally, eligible participants may elect
to defer "catch-up" contributions.
MATCHING EMPLOYER CONTRIBUTIONS
The employer's match is fifty percent (50%) of the participant's elective
deferrals, not to exceed six percent (6%) of the participant's
compensation. Matching employer contributions have been invested solely in
the Common Stock of SL Industries, Inc.
PROFIT SHARING CONTRIBUTIONS
A profit sharing contribution can be made annually to all Plan
participants who have earned at least 1,000 hours of service during the
Plan year and are employed on the last day of the plan year, with the
exception of participants who are disabled, die or retire. This is a
discretionary contribution determined by resolution of the Board of
Directors. Profit sharing contributions are invested in accordance with
the election of each participant.
9
SL INDUSTRIES, INC.
SAVINGS AND PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
2. INVESTMENTS (continued)
BENEFITS
At the time of separation, the vested portion of a participant's account
represents the participant's accumulated benefit. If a participant's
account balance is less than $5,000, a lump sum distribution will be made
regardless of whether the participant requests a distribution. A
participant who has an account balance of $5,000 or greater may elect to:
(1) continue to invest their accumulated benefit in the Plan until their
normal retirement date; (2) purchase a qualified joint and survivor
annuity; (3) receive payment in one lump sum; or (4) have any portion paid
directly to an eligible retirement plan specified by the distributee in a
direct rollover.
At the retirement date, a participant may elect to receive their
retirement benefit in one lump sum payment, in various types of
installments, or in the form of a qualified joint and survivor annuity.
The amount of the benefit payment depends on the value of the
participant's account and the retirement benefit option the participant
elects.
VESTING
Participants become immediately vested in their elective deferral
contributions plus actual earnings and their employer's profit sharing
contributions. Employer matching contributions become vested as follows:
Percentage
Years of Service Vested
---------------- ----------
Five years or more 100%
Four years or more, but less than five years 80%
Three years or more, but less than four years 60%
Two years or more, but less than three years 40%
One year or more, but less than two years 20%
Less than one year 0%
In determining years of service for vesting, the Plan considers service
from the participant's date of hire. Only whole years of service will be
counted for vesting purposes. The nonvested portion of a participant's
account, if any, will be forfeited in accordance with the provisions of
the Plan. Forfeitures will be allocated to the remaining participants'
accounts on a prorated basis as defined by the Plan.
INTEREST INCOME
For financial statement purposes, interest and dividend income includes
amounts earned on investments and participant loans. For purposes of
reporting on Form 5500 interest and dividend income only includes amounts
earned on participant loans.
10
SL INDUSTRIES, INC.
SAVINGS AND PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
2. INVESTMENTS (continued)
PARTICIPANT LOANS
The Plan makes loans to a participant, using the participant's account
balance as collateral. The minimum loan amount is $1,000 and may not
exceed the lesser of $50,000 or one-half of the participant's vested
account balance. Loans bear interest at an interest rate as determined by
the Plan Administrator based upon the prevailing rates of interest charged
by persons in the business of lending money. The interest rates on the
participant loans receivable as of December 31, 2003 and December 31, 2002
range from 5.25% to 10.25% and 4.75% to 10.25%, respectively. The term of
any loan to a participant shall be no greater than five years, except in
the case of a loan to acquire a dwelling unit that is considered a
principal residence, in which case the term is 10 years.
3. PLAN TERMINATION
While SL Industries, Inc. has not expressed any intent to do so, it may
terminate the Plan at any time, subject to the penalties set forth in
ERISA, as amended. In the event of such Plan termination, participants
will become 100% vested in their accounts.
4. ADMINISTRATIVE EXPENSES
Administrative expenses and asset management fees of the Plan may be paid
by SL Industries, Inc., at their discretion. Total asset management fees
paid by the Plan in the fiscal year ended December 31, 2003 were $15,262.
5. TAX STATUS
The Internal Revenue Service has issued a favorable determination letter
stating that the Plan meets the requirements for qualification pursuant to
Section 401(a) of the Internal Revenue Code (the "Code") and that the Plan
is exempt from federal income taxes under Section 501(a) of the Code.
Although the Plan has been amended since receiving the determination
letter, management believes that they are operating the Plan in accordance
with the Code. Accordingly, there is no provision for income taxes in the
accompanying financial statements.
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SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN
EIN: 21-0682685
PLAN NUMBER 001
FORM 5500, SCHEDULE H, LINE 4 I
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 2003
(D) (E)
(A) (B) (C) CURRENT
IDENTITY OF ISSUE DESCRIPTION COST VALUE
-------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK
* SL Industries, Inc. Common stock $2,040,019 2,017,062
COMMON TRUST FUND
Fidelity Institutional Retirement Services Co., Inc. Blended Income Fund 3,649,399 3,654,398
Fidelity Institutional Retirement Services Co., Inc. Fidelity Puritan Fund 710,565 704,262
Fidelity Institutional Retirement Services Co., Inc. Fidelity Growth & Income Portfolio 1,488,988 1,319,023
Fidelity Institutional Retirement Services Co., Inc. Fidelity Low-Priced Stock Fund 1,392,014 1,856,958
Fidelity Institutional Retirement Services Co., Inc. Fidelity Diversified Int'l. Fund 317,542 368,801
Fidelity Institutional Retirement Services Co., Inc. Fidelity Mid-Cap Stock Fund 1,408,844 1,530,518
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom Income Fund 64,818 66,335
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2000 Fund 210,382 207,092
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2010 Fund 619,201 613,890
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2020 Fund 877,984 854,220
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2030 Fund 539,393 544,024
Fidelity Institutional Retirement Services Co., Inc. Spartan US Equity Index Fund 1,259,057 1,222,176
Fidelity Institutional Retirement Services Co., Inc. Fidelity US Bond Index Fund 497,094 508,179
* Participant Loans Receivable Loans, ranging 1-10 years maturity
with interest rates of 5.25%-10.25% -- 421,013
----------- -----------
$15,075,300 $15,887,951
=========== ===========
* A party-in-interest as defined by ERISA
12
Exhibit Index
Number Description
23.1 Consent of Independent Accountants, Sobel & Co., LLC for the year
ended December 31, 2003.
13