SL Industries Inc (SLI, Financial) filed Quarterly Report for the period ended 2009-03-31.
SL Industries designs manufactures and markets power and data quality equipment and systems for industrial medical aerospace telecommunications and consumer applications. The company is comprised of six business segments: Power Supplies Power Conditioning and Distribution Units Motion Control Systems Electric Utility Equipment Protection Systems Surge Suppressors and Other. SL Industries Inc has a market cap of $42.6 million; its shares were traded at around $7.25 with a P/E ratio of 8.8 and P/S ratio of 0.2. SL Industries Inc had an annual average earning growth of 20.5% over the past 5 years.
Consolidated net sales for 2009 decreased by $9,129,000, or 20%, when compared to the same period in 2008. When compared to 2008, net sales of the Power Electronics Group decreased by $7,489,000, or 23%; net sales of SL-MTI decreased by $1,329,000, or 17%; and net sales of RFL decreased by $311,000, or 6%. All of the operating entities, except SLPE, reported income from operations in both 2009 and 2008.
Income from continuing operations was $245,000, or $0.04 per diluted share, in the first quarter of 2009, compared to $1,346,000, or $0.23 per diluted share, for the same period in 2008. Income from continuing operations was approximately 1% of net sales in 2009, compared to 3% of net sales in 2008. In 2009 and 2008, income from continuing operations benefited from research and development tax credits by approximately $97,000 and $101,000, respectively, or $0.02 per diluted share for both years. The Companys business segments and the components of operating expenses are discussed more fully in the following sections.
SLPE recorded a loss from operations of $181,000, representing 1% of its net sales, in 2009. In 2008, SLPE reported income from operations of $529,000, representing 3% of net sales. As a percentage of consolidated net sales, SLPE represented 36% of consolidated net sales in 2009, compared to 40% in 2008. At SLPE, sales of its medical product line decreased by $2,164,000, sales of its data communications product line decreased by $1,894,000 and sales of its industrial equipment product line decreased by $863,000. The decrease in the medical equipment product line was primarily the result of reduced orders from two major customers. The decrease in sales of the data communications product line was due to weak market demand in this segment. The decrease in sales of the industrial product line was caused by decreased orders from distributors, as a result of lower economic activity. Also, affecting net sales was the amount of returns and distributor credits, which represented approximately 3% of gross sales in 2009, compared to 2% in 2008. Domestic sales decreased by 27% and international sales decreased by 34%.
The High Power Group recorded income from operations, as a percentage of its net sales, of 8%, compared to 11% in 2008. MTE reported a loss from operations, as a percentage of sales, of 1% in 2009, compared to income from operations, as a percentage of sales, of 12% in 2008. This decline was primarily due to a sales decline of $1,554,000, or 27%, at MTE. MTEs sales decrease was driven by the overall global economic downturn. Sales to both OEMs and distributors have decreased sharply from last year. Domestic sales decreased 24%, while international sales decreased 32%. As a result, the cost of products sold percentage increased by 8%. Teal reported income from operations, as a percentage of sales, of 13% in 2009, compared to 10% in 2008. Teal reported a sales decrease of $837,000, or 10%, while cost of products sold decreased 4%, compared to 2008. Teals sales to military and aerospace customers increased by $1,291,000, while sales to medical imaging equipment manufacturers decreased by $1,507,000, and sales to semiconductor manufacturers decreased by $649,000.
SL-MTIs sales decreased $1,329,000, or 17%, while income from operations decreased by $301,000, or 28%. The sales decrease was driven by a $984,000 decrease in sales to customers in the defense and commercial aerospace industries. Sales of SL-MTIs medical product line decreased by $413,000. SL-MTIs other product line recorded an increase in sales of $68,000 in 2009. SL-MTIs cost of products sold percentage remained relatively constant in 2009, compared to 2008.
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SL Industries designs manufactures and markets power and data quality equipment and systems for industrial medical aerospace telecommunications and consumer applications. The company is comprised of six business segments: Power Supplies Power Conditioning and Distribution Units Motion Control Systems Electric Utility Equipment Protection Systems Surge Suppressors and Other. SL Industries Inc has a market cap of $42.6 million; its shares were traded at around $7.25 with a P/E ratio of 8.8 and P/S ratio of 0.2. SL Industries Inc had an annual average earning growth of 20.5% over the past 5 years.
Highlight of Business Operations:
During the three-month period ended March 31, 2009, the net cash provided by operating activities from continuing operations was $189,000, as compared to net cash used in operating activities from continuing operations of $2,133,000 during the three-month period ended March 31, 2008. The sources of cash from operating activities for the three-month period ended March 31, 2009 were income from continuing operations of $245,000, a decrease in accounts receivable of $2,429,000 primarily related to improved collections at SLPE of $1,446,000 as days sales outstanding (defined as current accounts receivable divided by the average of the last three months sales (DSOs)), were 54.4 days versus a budget 61.1 days and a decrease in inventories of $682,000. These sources of cash were primarily offset by a decrease in accounts payable of $2,101,000, a decrease in accrued liabilities of $1,664,000 and an increase in prepaid expenses of $319,000. The decreases in accounts payable were primarily related to SLPE of $930,000 and legal and environmental payables of $370,000 related to discontinued operations. The increase in prepaid expenses was primarily related to the renewal of certain insurance policies in the first quarter. The primary uses of cash from operating activities for the three-month period ended March 31, 2008 were a decrease in accrued liabilities of $2,852,000, a decrease in accounts payable of $666,000, cash used in discontinued operations of $901,000, an increase in inventories of $738,000 and an increase in prepaid expenses of $421,000. These uses of cash were partially offset by income from continuing operations of $1,346,000.Consolidated net sales for 2009 decreased by $9,129,000, or 20%, when compared to the same period in 2008. When compared to 2008, net sales of the Power Electronics Group decreased by $7,489,000, or 23%; net sales of SL-MTI decreased by $1,329,000, or 17%; and net sales of RFL decreased by $311,000, or 6%. All of the operating entities, except SLPE, reported income from operations in both 2009 and 2008.
Income from continuing operations was $245,000, or $0.04 per diluted share, in the first quarter of 2009, compared to $1,346,000, or $0.23 per diluted share, for the same period in 2008. Income from continuing operations was approximately 1% of net sales in 2009, compared to 3% of net sales in 2008. In 2009 and 2008, income from continuing operations benefited from research and development tax credits by approximately $97,000 and $101,000, respectively, or $0.02 per diluted share for both years. The Companys business segments and the components of operating expenses are discussed more fully in the following sections.
SLPE recorded a loss from operations of $181,000, representing 1% of its net sales, in 2009. In 2008, SLPE reported income from operations of $529,000, representing 3% of net sales. As a percentage of consolidated net sales, SLPE represented 36% of consolidated net sales in 2009, compared to 40% in 2008. At SLPE, sales of its medical product line decreased by $2,164,000, sales of its data communications product line decreased by $1,894,000 and sales of its industrial equipment product line decreased by $863,000. The decrease in the medical equipment product line was primarily the result of reduced orders from two major customers. The decrease in sales of the data communications product line was due to weak market demand in this segment. The decrease in sales of the industrial product line was caused by decreased orders from distributors, as a result of lower economic activity. Also, affecting net sales was the amount of returns and distributor credits, which represented approximately 3% of gross sales in 2009, compared to 2% in 2008. Domestic sales decreased by 27% and international sales decreased by 34%.
The High Power Group recorded income from operations, as a percentage of its net sales, of 8%, compared to 11% in 2008. MTE reported a loss from operations, as a percentage of sales, of 1% in 2009, compared to income from operations, as a percentage of sales, of 12% in 2008. This decline was primarily due to a sales decline of $1,554,000, or 27%, at MTE. MTEs sales decrease was driven by the overall global economic downturn. Sales to both OEMs and distributors have decreased sharply from last year. Domestic sales decreased 24%, while international sales decreased 32%. As a result, the cost of products sold percentage increased by 8%. Teal reported income from operations, as a percentage of sales, of 13% in 2009, compared to 10% in 2008. Teal reported a sales decrease of $837,000, or 10%, while cost of products sold decreased 4%, compared to 2008. Teals sales to military and aerospace customers increased by $1,291,000, while sales to medical imaging equipment manufacturers decreased by $1,507,000, and sales to semiconductor manufacturers decreased by $649,000.
SL-MTIs sales decreased $1,329,000, or 17%, while income from operations decreased by $301,000, or 28%. The sales decrease was driven by a $984,000 decrease in sales to customers in the defense and commercial aerospace industries. Sales of SL-MTIs medical product line decreased by $413,000. SL-MTIs other product line recorded an increase in sales of $68,000 in 2009. SL-MTIs cost of products sold percentage remained relatively constant in 2009, compared to 2008.
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