UNITED STATES
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) November 24, 2003
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SL INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
New Jersey 1-4987 21-0682685
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(State or other jurisdiction (Commission (IRS 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) (Zip Code)
Registrant's telephone number, including area code (856) 727-1500
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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 SL Industries, Inc.'s (the
"Registrant") current Report on Form 8-K filed with the Securities and Exchange
Commission on November 26, 2003 to provide the required Unaudited Pro Forma
Financial Statements reflecting the sale of the operating assets of SL Surface
Technologies, Inc. ("SurfTech"), a wholly owned subsidiary of the Registrant and
to reflect the use of the proceeds to pay debt.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On November 24, 2003, SurfTech, a wholly owned subsidiary of the
Registrant, sold the operating assets of its business to Everlast Coatings Inc.
(the "Purchaser") pursuant to an Asset Purchase Agreement (the "Purchase
Agreement").
Description of Assets
SurfTech sold the operating assets of its business, which was engaged
in coatings and platings. The Registrant retained (a) the land and building and
(b) specific liabilities as detailed in the Purchase Agreement.
Consideration
Pursuant to the terms of the sale, the consideration paid by the
Purchaser was $600,000 in cash plus the assumption of certain liabilities. The
consideration was determined by arms-length negotiation. Cash proceeds were used
to pay debt.
Relationship with Purchaser
John R. Willey, the President of the Purchaser, was a former executive
of SurfTech. In connection with the sale, the Registrant entered into a ten (10)
year lease with the Purchaser for the lease of the land and building retained by
the Registrant.
Other than as described herein, 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,
which is attached to the Registrant's Current Report on Form 8-K dated November
26, 2003.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
Unaudited Pro Forma Consolidated Statement of Operations for
the year ended December 31, 2002.
Unaudited Pro Forma Consolidated Statement of Operations for
the nine months ended September 30, 2003.
Unaudited Pro Forma Consolidated Balance Sheet as of September
30, 2003.
(c) Exhibits.
2.1 Asset Purchase Agreement
2.2 Lease Agreement
Item 7 (b) Basis of Presentation
The following Unaudited Pro Forma Consolidated Financial
Statements reflect the sale of the operating assets of SurfTech, a
wholly owned subsidiary of the Registrant 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, Inc.'s Annual Report on
Form 10-K for the year ended December 31, 2002 and the Quarterly
Report on Form 10-Q for the period ended September 30, 2003.
The unaudited pro forma information is presented for
illustrative purposes only and is not necessarily indicative of
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 the operating assets of SurfTech as if it
had occurred on September 30, 2003 and the use of proceeds to pay
current maturities of debt.
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SL Industries, Inc.
Pro Forma Consolidated Statement Of Operations
For The Year Ended December 31, 2002
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SL (1)
Industries, Inc. SurfTech Adjustments Pro Forma
---------------- -------- ----------- ---------
(Historical) (Historical)
Net sales $ 110,149 $ 2,237 $ -- $ 107,912
--------- --------- --------- ---------
Cost of sales 71,199 1,828 18 (2) 69,389
Engineering & product development 7,579 0 0 7,579
Selling, general and administrative 25,194 984 (18)(3) 24,192
Depreciation and amortization 2,948 314 83 (4) 2,717
Restructuring costs 265 35 0 230
Impairment of intangibles 703 703 0 0
Special charges 1,834 0 0 1,834
--------- --------- --------- ---------
Total cost and expenses 109,722 3,864 83 105,941
Income (loss) from operations 427 (1,627) (83) 1,971
Other income (expense):
Interest income 25 0 25
Interest expense (2,454) (198) (159)(5) (2,415)
--------- --------- --------- ---------
Loss from continuing operations before income taxes (2,002) (1,825) (242) (419)
Income tax (benefit) (755) (474) (82)(6) (363)
--------- --------- --------- ---------
Loss from continuing operations $ (1,247) $ (1,351) $ (160) $ (56)
Basic net income (loss) per common share $ (0.21) $ (0.01)
Diluted net income (loss) per common share $ (0.21) $ (0.01)
Weighted shares outstanding - basic 5,867 5,867
Weighted shares outstanding - diluted 5,867 5,867
The accompanying notes are an integral part of the Pro Forma Financial
Statements.
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SL Industries, Inc.
Pro Forma Consolidated Statement Of Operations
For The Nine Months Ended September 30, 2003
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SL (1)
Industries, Inc. SurfTech Adjustments Pro Forma
---------------- -------- ----------- ---------
(Historical) (Historical)
Net sales $ 80,394 $ 1,514 $ -- $ 78,880
-------- -------- -------- --------
Cost of sales 51,250 1,293 14 (2) 49,971
Engineering & product development 5,788 0 0 5,788
Selling, general and administrative 18,636 569 (14)(3) 18,053
Depreciation and amortization 1,891 180 64 (4) 1,775
Asset impairment charges 703 703 0 0
-------- -------- -------- --------
Total cost and expenses 78,268 2,745 64 75,587
Income (loss) from operations 2,126 (1,231) (64) 3,293
Other income (expense):
Interest income 130 0 0 130
Interest expense (440) (83) (49)(5) (406)
-------- -------- -------- --------
Income (loss) from continuing operations before income taxes 1,816 (1,314) (113) 3,017
Income tax provision (benefit) 776 (405) (38)(6) 1,143
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Income (loss) from continuing operations $ 1,040 $ (909) $ (75) $ 1,874
Basic net income (loss) per common share $ 0.18 $ 0.32
Diluted net income (loss) per common share $ 0.18 $ 0.32
Weighted shares outstanding - basic 5,908 5,908
Weighted shares outstanding - diluted 5,931 5,931
The accompanying notes are an integral part of the Pro Forma Financial
Statements.
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SL Industries, Inc.
Pro Forma Consolidated Balance Sheet
September 30, 2003
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SL (1)
Industries, Inc. SurfTech Adjustments Pro Forma
---------------- -------- ----------- ---------
ASSETS (Historical)
Current assets:
Cash and equivalents $ 648 $ -- $ -- $ 648
Receivables, net 15,762 389 12 (7) 15,385
Note receivable 1,000 0 0 1,000
Inventories, net 11,290 78 0 11,212
Prepaid expenses 917 3 0 914
Deferred income taxes, net 4,381 0 0 4,381
-------- -------- -------- --------
Total current assets 33,998 470 12 33,540
Property, plant & equipment, net 9,849 213 (82)(8) 9,554
Deferred income taxes, net 3,423 0 0 3,423
Goodwill, net 10,303 0 0 10,303
Other intangible assets, net 1,009 0 0 1,009
Other assets and deferred charges 1,694 0 0 1,694
-------- -------- -------- --------
Total assets $ 60,276 $ 683 $ (70) $ 59,523
======== ======== ======== ========
LIABILITIES
Current liabilities:
Debt, current portion $ 1,310 $ -- $ (618)(9) $ 692
Accounts payable 3,255 43 0 3,212
Accrued income taxes 2,459 0 (268)(10) 2,191
Accrued payroll and related costs 4,196 30 650 (11) 4,816
Other accrued liabilities 6,667 10 85 (12) 6,742
-------- -------- -------- --------
Total current liabilities 17,887 83 (151) 17,653
-------- -------- -------- --------
Debt, less current portion 2,507 0 0 2,507
Deferred compensation and supplemental retirement benefits 3,996 0 0 3,996
Other liabilities 883 0 0 883
-------- -------- -------- --------
Total liabilities $ 25,273 $ 83 $ (151) $ 25,039
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SHAREHOLDERS' EQUITY
Common stock, $.20 par value;
authorized, 25,0000,000 shares;
issued 8,298,000 shares $ 1,660 $ -- $ 0 $ 1,660
Capital in excess of par value 38,822 0 0 38,822
Retained earnings 9,467 0 (519)(13) 8,948
Treasury stock at cost, 2,359,000 (14,946) 0 0 (14,946)
-------- -------- -------- --------
Total shareholders' equity $ 35,003 $ -- $ (519) $ 34,484
-------- -------- -------- --------
Total liabilities and shareholders' equity $ 60,276 $ 83 $ (670) $ 59,523
======== ======== ======== ========
The accompanying notes are an integral part of the Pro Forma Financial
Statements.
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SL INDUSTRIES, INC.
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL STATEMENTS
1. Eliminates the results of operations of SurfTech for the period as if
the sale had been completed as of the beginning of the operating
periods presented. Also, eliminates the operating assets and
liabilities of SurfTech as if the sale had been completed as of
September 30, 2003.
2. Reflects the net operating lease commitment related to equipment, which
was not sold.
3. Reflects rental income to be received related to the building, which is
occupied by the purchaser as part of the lease agreement.
4. Depreciation expense for the periods presented for the building, which
was retained by SL Industries.
5. Reflects the add back of inter-company interest expense net of a
reduction of interest expense attributable to the application of the
proceeds from the sale of the SurfTech's operations to reduce debt.
6. Reflects the income tax effect of the pro forma adjustments at the U.S.
federal statutory rate of 34%.
7. Represents the portion of the sale proceeds paid into escrow at
closing.
8. Reflects the sale of equipment directly related to the sale of
SurfTech's operating assets.
9. Reflects the application of the proceeds from the sale of SurfTech's
operating assets and other equipment sold to a third party, the
proceeds of which were used to reduce debt.
10. Reflects the tax benefit related to the loss on the sale of SurfTech's
operating assets.
11. Reflects the estimated liability related to certain exit costs.
12. Estimated closing and lease termination costs.
13. Net loss on the sale net of tax.
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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: December 9, 2003
By: /s/ David R. Nuzzo
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David R. Nuzzo
Vice President Finance and
Administration
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EXHIBIT INDEX
Exhibit No. Description
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2.1 Asset Purchase Agreement
2.2 Lease Agreement
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