Attached files
| file | filename |
|---|---|
| 8-K - 8-K - SL INDUSTRIES INC | d824573d8k.htm |
| EX-2.1 - EX-2.1 - SL INDUSTRIES INC | d824573dex21.htm |
| EX-10.1 - EX-10.1 - SL INDUSTRIES INC | d824573dex101.htm |
| EX-99.2 - EX-99.2 - SL INDUSTRIES INC | d824573dex992.htm |
Exhibit 99.1
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated balance sheet and consolidated statements of income are based upon the historical consolidated financial statements of SL Industries, Inc. (the “Company”), as adjusted to reflect the sale of RFL Electronics Inc. (“RFL”) to Hubbell Power Systems, Inc. for $20,000,000 in cash, subject to a working capital adjustment. The unaudited pro forma consolidated balance sheet as of September 30, 2014 reflects the pro forma effect as if the RFL disposition had been consummated on that date. The unaudited pro forma consolidated statements of income for the nine months ended September 30, 2014 and the years ended December 31, 2013, December 31, 2012, and December 31, 2011 include the Company’s historical consolidated statements of income, adjusted to reflect the pro forma effect as if the RFL disposition had been consummated on January 1, 2011 (the first day of the Company’s 2011 fiscal year). The historical consolidated financial statements referred to above for the Company were included in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 and Annual Report on Form 10-K for the year ended December 31, 2013. The accompanying unaudited pro forma consolidated financial information and the historical consolidated financial information presented therein should be read in conjunction with the historical consolidated financial statements and notes thereto for the Company.
The unaudited pro forma consolidated balance sheet and consolidated statements of income include pro forma adjustments which reflect transactions and events that (a) are directly attributable to the sale, (b) are factually supportable and (c) with respect to the statement of income, have a continuing impact on consolidated results. The pro forma adjustments are described in the accompanying notes to the unaudited pro forma consolidated financial statements.
The preparation of this unaudited pro forma consolidated financial information requires management to make estimates and assumptions based upon the information known at that time. The unaudited pro forma consolidated financial information is provided for informational purposes only and is not necessarily indicative of the results of operations that would have occurred if the RFL disposition had occurred on January 1, 2011 or September 30, 2014, as applicable, nor is it necessarily indicative of the Company’s future operating results. The pro forma adjustments are subject to change and are based upon currently available information.
SL INDUSTRIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
(Unaudited)
| September 30, 2014 | ||||||||||||
| Consolidated | Pro Forma | |||||||||||
| Historical | Adjustments | Pro Forma | ||||||||||
| ASSETS |
||||||||||||
| Current assets: |
||||||||||||
| Cash and cash equivalents |
$ | 11,573,000 | $ | 20,000,000 | (a) | $ | 31,573,000 | |||||
| Receivables, net |
36,072,000 | (2,924,000 | ) (b) | 33,148,000 | ||||||||
| Inventories, net |
26,800,000 | (1,856,000 | ) (b) | 24,944,000 | ||||||||
| Other current assets |
2,494,000 | (117,000 | ) (b) | 2,377,000 | ||||||||
| Deferred income taxes, net |
2,853,000 | — | 2,853,000 | |||||||||
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| Total current assets |
79,792,000 | 15,103,000 | 94,895,000 | |||||||||
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| Property, plant and equipment, net |
11,401,000 | (3,539,000 | ) (b) | 7,862,000 | ||||||||
| Deferred income taxes, net |
9,842,000 | (123,000 | ) (b) | 9,719,000 | ||||||||
| Goodwill |
18,033,000 | (5,249,000 | ) (b) | 12,784,000 | ||||||||
| Other intangible assets, net |
4,016,000 | (106,000 | ) (b) | 3,910,000 | ||||||||
| Other assets and deferred charges, net |
1,361,000 | (323,000 | ) (b) | 1,038,000 | ||||||||
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| Total assets |
$ | 124,445,000 | $ | 5,763,000 | $ | 130,208,000 | ||||||
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| LIABILITIES |
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| Current liabilities: |
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| Short-term borrowings and current portion of long-term debt |
$ | 48,000 | $ | (48,000 | ) (b) | $ | — | |||||
| Accounts payable |
19,794,000 | (1,320,000 | ) (b) | 18,474,000 | ||||||||
| Accrued income taxes |
2,331,000 | 2,319,000 | (b),(c) | 4,650,000 | ||||||||
| Accrued liabilities: |
— | |||||||||||
| Payroll and related costs |
5,477,000 | (381,000 | ) (b) | 5,096,000 | ||||||||
| Other |
15,019,000 | 961,000 | (b),(d) | 15,980,000 | ||||||||
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| Total current liabilities |
42,669,000 | 1,531,000 | 44,200,000 | |||||||||
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| Long-term debt, less current maturites |
152,000 | (152,000 | ) (b) | — | ||||||||
| Deferred compensation and supplemental retirement benefits |
1,553,000 | (183,000 | ) (b) | 1,370,000 | ||||||||
| Other long-term liabilities |
10,768,000 | — | 10,768,000 | |||||||||
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| Total liabilities |
55,142,000 | 1,196,000 | 56,338,000 | |||||||||
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| SHAREHOLDERS’ EQUITY |
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| Preferred stock, no par value; authorized, 6,000,000 shares; none issued |
— | — | — | |||||||||
| Common stock, $.20 par value; authorized, 25,000,000 shares; |
— | |||||||||||
| issued, 6,656,000 and 6,656,000 shares, respectively |
1,331,000 | — | 1,331,000 | |||||||||
| Capital in excess of par value |
22,504,000 | — | 22,504,000 | |||||||||
| Retained earnings |
71,470,000 | 4,567,000 | (e) | 76,037,000 | ||||||||
| Accumulated other comprehensive (loss), net of tax |
(468,000 | ) | — | (468,000 | ) | |||||||
| Treasury stock at cost, 2,512,000 and 2,530,000 shares, respectively |
(25,534,000 | ) | — | (25,534,000 | ) | |||||||
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| Total shareholders’ equity |
69,303,000 | 4,567,000 | 73,870,000 | |||||||||
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| Total liabilities and shareholders’ equity |
$ | 124,445,000 | $ | 5,763,000 | $ | 130,208,000 | ||||||
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SL INDUSTRIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
| Nine Months Ended September 30, 2014 | ||||||||||||
| Consolidated | Pro Forma | |||||||||||
| Historical | Adjustments | Pro Forma | ||||||||||
| Net sales |
$ | 165,508,000 | $ | 14,368,000 | (b) | $ | 151,140,000 | |||||
| Cost and expenses: |
||||||||||||
| Cost of products sold |
108,813,000 | 7,117,000 | (b) | 101,696,000 | ||||||||
| Engineering and product development |
9,805,000 | 1,363,000 | (b) | 8,442,000 | ||||||||
| Selling, general and administrative |
28,324,000 | 4,319,000 | (b) | 24,005,000 | ||||||||
| Depreciation and amortization |
1,927,000 | 319,000 | (b) | 1,608,000 | ||||||||
| Restructuring charges |
463,000 | — | 463,000 | |||||||||
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| Total cost and expenses |
149,332,000 | 13,118,000 | 136,214,000 | |||||||||
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| Income from operations |
16,176,000 | 1,250,000 | 14,926,000 | |||||||||
| Other income (expense): |
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| Amortization of deferred financing costs |
(65,000 | ) | — | (65,000 | ) | |||||||
| Interest income |
5,000 | — | 5,000 | |||||||||
| Interest expense |
(52,000 | ) | (31,000 | ) (b) | (21,000 | ) | ||||||
| Other gain (loss), net |
1,535,000 | — | 1,535,000 | |||||||||
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| Income from continuing operations before income taxes |
17,599,000 | 1,219,000 | 16,380,000 | |||||||||
| Income tax provision |
6,259,000 | 427,000 | (f) | 5,832,000 | ||||||||
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| Income from continuing operations |
11,340,000 | 792,000 | 10,548,000 | |||||||||
| (Loss) from discontinued operations, net of tax |
(390,000 | ) | — | (390,000 | ) | |||||||
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| Net income |
$ | 10,950,000 | $ | 792,000 | $ | 10,158,000 | ||||||
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| Basic net income (loss) per common share |
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| Income from continuing operations |
$ | 2.74 | $ | 0.19 | $ | 2.55 | ||||||
| (Loss) from discontinued operations, net of tax |
(0.09 | ) | — | (0.09 | ) | |||||||
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| Net income |
$ | 2.65 | $ | 0.19 | $ | 2.46 | ||||||
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| Diluted net income (loss) per common share |
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| Income from continuing operations |
$ | 2.71 | $ | 0.19 | $ | 2.52 | ||||||
| (Loss) from discontinued operations, net of tax |
(0.09 | ) | — | (0.09 | ) | |||||||
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| Net income |
$ | 2.62 | $ | 0.19 | $ | 2.43 | ||||||
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| Shares used in computing basic net income (loss) per common share |
4,137,000 | 4,137,000 | 4,137,000 | |||||||||
| Shares used in computing diluted net income (loss) per common share |
4,178,000 | 4,178,000 | 4,178,000 | |||||||||
SL INDUSTRIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
| Year Ended December 31, 2013 | ||||||||||||
| Consolidated | Pro Forma | |||||||||||
| Historical | Adjustments | Pro Forma | ||||||||||
| Net sales |
$ | 204,688,000 | $ | 20,030,000 | (b) | $ | 184,658,000 | |||||
| Cost and expenses: |
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| Cost of products sold |
135,837,000 | 9,405,000 | (b) | 126,432,000 | ||||||||
| Engineering and product development |
13,054,000 | 1,714,000 | (b) | 11,340,000 | ||||||||
| Selling, general and administrative |
35,425,000 | 5,839,000 | (b) | 29,586,000 | ||||||||
| Depreciation and amortization |
2,406,000 | 396,000 | (b) | 2,010,000 | ||||||||
| Goodwill impairment |
5,055,000 | — | 5,055,000 | |||||||||
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| Total cost and expenses |
191,777,000 | 17,354,000 | 174,423,000 | |||||||||
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| Income from operations |
12,911,000 | 2,676,000 | 10,235,000 | |||||||||
| Other income (expense): |
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| Amortization of deferred financing costs |
(83,000 | ) | — | (83,000 | ) | |||||||
| Interest income |
12,000 | — | 12,000 | |||||||||
| Interest expense |
(87,000 | ) | (26,000 | ) (b) | (61,000 | ) | ||||||
| Other gain (loss), net |
124,000 | 202,000 | (b) | (78,000 | ) | |||||||
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| Income from continuing operations before income taxes |
12,877,000 | 2,852,000 | 10,025,000 | |||||||||
| Income tax provision |
3,545,000 | 998,000 | (f) | 2,547,000 | ||||||||
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| Income from continuing operations |
9,332,000 | 1,854,000 | 7,478,000 | |||||||||
| (Loss) from discontinued operations, net of tax |
(1,092,000 | ) | — | (1,092,000 | ) | |||||||
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| Net income |
$ | 8,240,000 | $ | 1,854,000 | $ | 6,386,000 | ||||||
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| Basic net income (loss) per common share |
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| Income from continuing operations |
$ | 2.25 | $ | 0.45 | $ | 1.80 | ||||||
| (Loss) from discontinued operations, net of tax |
(0.26 | ) | — | (0.26 | ) | |||||||
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| Net income |
$ | 1.99 | $ | 0.45 | $ | 1.54 | ||||||
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| Diluted net income (loss) per common share |
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| Income from continuing operations |
$ | 2.23 | $ | 0.44 | $ | 1.79 | ||||||
| (Loss) from discontinued operations, net of tax |
(0.26 | ) | — | (0.26 | ) | |||||||
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| Net income |
$ | 1.97 | $ | 0.44 | $ | 1.53 | ||||||
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| Shares used in computing basic net income (loss) per common share |
4,138,000 | 4,138,000 | 4,138,000 | |||||||||
| Shares used in computing diluted net income (loss) per common share |
4,184,000 | 4,184,000 | 4,184,000 | |||||||||
SL INDUSTRIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
| Year Ended December 31, 2012 | ||||||||||||
| Consolidated | Pro Forma | |||||||||||
| Historical | Adjustments | Pro Forma | ||||||||||
| Net sales |
$ | 200,577,000 | $ | 21,202,000 | (b) | $ | 179,375,000 | |||||
| Cost and expenses: |
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| Cost of products sold |
136,542,000 | 10,479,000 | (b) | 126,063,000 | ||||||||
| Engineering and product development |
11,746,000 | 1,728,000 | (b) | 10,018,000 | ||||||||
| Selling, general and administrative |
35,820,000 | 5,750,000 | (b) | 30,070,000 | ||||||||
| Depreciation and amortization |
2,711,000 | 415,000 | (b) | 2,296,000 | ||||||||
| Restructuring charges |
857,000 | 67,000 | (b) | 790,000 | ||||||||
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| Total cost and expenses |
187,676,000 | 18,439,000 | 169,237,000 | |||||||||
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| Income from operations |
12,901,000 | 2,763,000 | 10,138,000 | |||||||||
| Other income (expense): |
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| Amortization of deferred financing costs |
(138,000 | ) | — | (138,000 | ) | |||||||
| Interest income |
5,000 | — | 5,000 | |||||||||
| Interest expense |
(48,000 | ) | (25,000) | (b) | (23,000 | ) | ||||||
| Other gain (loss), net |
302,000 | 59,000 | (b) | 243,000 | ||||||||
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| Income from continuing operations before income taxes |
13,022,000 | 2,797,000 | 10,225,000 | |||||||||
| Income tax provision |
3,665,000 | 979,000 | (f) | 2,686,000 | ||||||||
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| Income from continuing operations |
9,357,000 | 1,818,000 | 7,539,000 | |||||||||
| (Loss) from discontinued operations, net of tax |
(1,580,000 | ) | — | (1,580,000 | ) | |||||||
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| Net income |
$ | 7,777,000 | $ | 1,818,000 | $ | 5,959,000 | ||||||
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| Basic net income (loss) per common share |
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| Income from continuing operations |
$ | 2.17 | $ | 0.42 | $ | 1.75 | ||||||
| (Loss) from discontinued operations, net of tax |
(0.37 | ) | — | (0.37 | ) | |||||||
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| Net income |
$ | 1.80 | $ | 0.42 | $ | 1.38 | ||||||
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| Diluted net income (loss) per common share |
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| Income from continuing operations |
$ | 2.16 | $ | 0.42 | $ | 1.74 | ||||||
| (Loss) from discontinued operations, net of tax |
(0.36 | ) | — | (0.36 | ) | |||||||
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| Net income |
$ | 1.80 | $ | 0.42 | $ | 1.38 | ||||||
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| Shares used in computing basic net income (loss) per common share |
4,313,000 | 4,313,000 | 4,313,000 | |||||||||
| Shares used in computing diluted net income (loss) per common share |
4,330,000 | 4,330,000 | 4,330,000 | |||||||||
SL INDUSTRIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
| Year Ended December 31, 2011 | ||||||||||||
| Consolidated | Pro Forma | |||||||||||
| Historical | Adjustments | Pro Forma | ||||||||||
| Net sales |
$ | 212,331,000 | $ | 22,825,000 | (b) | $ | 189,506,000 | |||||
| Cost and expenses: |
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| Cost of products sold |
143,420,000 | 11,704,000 | (b) | 131,716,000 | ||||||||
| Engineering and product development |
12,820,000 | 1,553,000 | (b) | 11,267,000 | ||||||||
| Selling, general and administrative |
34,426,000 | 5,906,000 | (b) | 28,520,000 | ||||||||
| Depreciation and amortization |
2,870,000 | 473,000 | (b) | 2,397,000 | ||||||||
| Restructuring charges |
261,000 | — | 261,000 | |||||||||
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| Total cost and expenses |
193,797,000 | 19,636,000 | 174,161,000 | |||||||||
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| Income from operations |
18,534,000 | 3,189,000 | 15,345,000 | |||||||||
| Other income (expense): |
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| Amortization of deferred financing costs |
(218,000 | ) | — | (218,000 | ) | |||||||
| Interest income |
3,000 | — | 3,000 | |||||||||
| Interest expense |
(179,000 | ) | (45,000 | ) (b) | (134,000 | ) | ||||||
| Fire related gain |
277,000 | — | 277,000 | |||||||||
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| Income from continuing operations before income taxes |
18,417,000 | 3,144,000 | 15,273,000 | |||||||||
| Income tax provision |
5,582,000 | 1,101,000 | (f) | 4,481,000 | ||||||||
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| Income from continuing operations |
12,835,000 | 2,043,000 | 10,792,000 | |||||||||
| (Loss) from discontinued operations, net of tax |
(4,637,000 | ) | — | (4,637,000 | ) | |||||||
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| Net income |
$ | 8,198,000 | $ | 2,043,000 | $ | 6,155,000 | ||||||
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| Basic net income (loss) per common share |
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| Income from continuing operations |
$ | 2.83 | $ | 0.45 | $ | 2.38 | ||||||
| (Loss) from discontinued operations, net of tax |
(1.02 | ) | — | (1.02 | ) | |||||||
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| Net income |
$ | 1.81 | $ | 0.45 | $ | 1.36 | ||||||
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| Diluted net income (loss) per common share |
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| Income from continuing operations |
$ | 2.80 | $ | 0.45 | $ | 2.36 | ||||||
| (Loss) from discontinued operations, net of tax |
(1.01 | ) | — | (1.01 | ) | |||||||
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| Net income |
$ | 1.79 | $ | 0.45 | $ | 1.35 | ||||||
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| Shares used in computing basic net income (loss) per common share |
4,535,000 | 4,535,000 | 4,535,000 | |||||||||
| Shares used in computing diluted net income (loss) per common share |
4,573,000 | 4,573,000 | 4,573,000 | |||||||||
Basis of Presentation
The unaudited pro forma consolidated balance sheet and consolidated statements of income are based upon the historical consolidated financial statements of the Company, which were included in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 and Annual Report on Form 10-K for the year ended December 31, 2013. The unaudited pro forma consolidated balance sheet as of September 30, 2014 reflects the pro forma effect as if the disposition of RFL had been consummated on that date. The unaudited pro forma consolidated statements of income for the nine months ended September 30, 2014 and the years ended December 31, 2013, December 31, 2012, and December 31, 2011 include the Company’s historical statements of income, adjusted to reflect the pro forma effect as if the RFL disposition had been consummated on January 1, 2011 (the first day of the Company’s 2011 fiscal year).
Pro Forma Adjustments
(a) To include the pre-tax cash proceeds from the disposition of RFL of $20,000,000 as of September 30, 2014.
(b) To reflect the elimination of assets and liabilities included in the disposition of RFL and historical revenues and expenses.
(c) To reflect accrued income taxes of $2,459,000 related to the estimated pre-tax gain on sale of RFL based on the estimated statutory tax rate.
(d) To reflect a total accrual of $1,365,000 for professional services related to the sale and post-closing adjustments.
(e) To reflect the estimated after-tax effect on retained earnings due to the disposition of RFL.
(f) To reflect the income tax effect resulting from the pro forma effect of the disposition of RFL based upon the estimated statutory tax rate.