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, 2004 and 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
By: /s/ David R. Nuzzo
-----------------------------------------
David R. Nuzzo
Plan Administrator
June 27, 2005
2
SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Report of Independent Registered Public Accounting
Firm for the years ended December 31, 2004 and 2003 4
Financial Statements:
Statements of Net Assets Available for Benefits
December 31, 2004 and December 31, 2003 5
Statements of Changes in Net Assets Available for Benefits
for the years ended December 31, 2004 and 2003 6
Notes to Financial Statements 7-11
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets Held at end of year
December 31, 2004 12
Exhibit Index 13
Consent of Independent Registered Public Accounting Firm 14
3
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Plan Administrator
SL Industries, Inc. Savings and Pension Plan
Mount Laurel, New Jersey
We have audited the accompanying statements of net assets available for benefits
of the SL Industries, Inc. Savings and Pension Plan ("the Plan") as of December
31, 2004 and 2003, and the related statements of changes in net assets available
for benefits for the years ended December 31, 2004 and 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 audits.
We conducted our audits 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 audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Plan's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide 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,
2004 and 2003 and the changes in net assets available for benefits for the years
ended December 31, 2004 and 2003, in conformity with accounting principles
generally accepted in the United States of America.
Our audits were 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
May 3, 2005
4
SL INDUSTRIES, INC.
SAVINGS AND PENSION PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
2004 2003
----------- -----------
INVESTMENTS $18,494,594 $15,887,951
----------- -----------
RECEIVABLES
Employer contributions 280,382 261,851
Participant contributions 73,093 52,644
----------- -----------
TOTAL RECEIVABLES 353,475 314,495
----------- -----------
CASH 37,838 24,697
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $18,885,907 $16,227,143
=========== ===========
The accompanying notes are an integral part of these financial statements.
5
SL INDUSTRIES, INC.
SAVINGS AND PENSION PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
December 31,
2004 2003
----------- -----------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
INVESTMENT INCOME:
Net appreciation in fair value of investments $ 2,239,317 $ 2,142,771
Net realized gain on sale of investments 126,430 390,371
Interest/dividends 455,447 353,127
CONTRIBUTIONS:
Employer 572,830 536,940
Participant 963,044 859,920
Rollover - 12,907
----------- -----------
TOTAL ADDITIONS: 4,357,068 4,296,036
----------- -----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 1,653,275 824,356
Administrative expenses 45,029 15,262
----------- -----------
TOTAL DEDUCTIONS 1,698,304 839,618
----------- -----------
NET INCREASE 2,658,764 3,456,418
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 16,227,143 12,770,725
----------- -----------
End of year $18,885,907 $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, 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 sixteen
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 2015 Fund,
Freedom 2020 Fund, Freedom 2025 Fund, Freedom 2030 Fund, Freedom 2035 Fund,
Spartan U.S. Equity Index Fund and U.S. Bond Index 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 2004 and 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 $2,365,747 and $2,533,142 as follows:
2004 2003
---------- ----------
Mutual funds $ 925,470 $1,875,366
Common stock 1,440,277 657,776
---------- ----------
$2,365,747 $2,533,142
========== ==========
The following table represents investments that represent 5% or more of the
Plan's net assets:
December 31,
2004 2003
---------- ----------
Blended Income Fund $3,594,459 $3,654,398
*SL Industries, Inc. Common Stock 3,285,503 2,017,062
Fidelity Growth and Income Portfolio 1,514,440 1,319,023
Fidelity Low Priced Stock Fund 2,389,825 1,856,958
Fidelity Mid-Cap Stock Fund 1,679,429 1,530,518
Spartan U.S, Equity Index Fund 1,423,674 1,222,176
Fidelity Freedom 2020 968,666 854,220
* 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, 2004 and 2003:
2004 2003
----------- ---------
Changes in net assets:
Contributions $ 346,882 $ 342,006
Net appreciation 1,440,277 657,776
Benefits paid to participants (205,460) (49,229)
Transfer/loan activity (313,258) (172,334)
----------- ---------
Net changes $ 1,268,441 $ 778,219
=========== =========
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
$13,000 and $12,000 in the calendar years 2004 and 2003, respectively, 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, 2004 and December 31, 2003 range from
4.75% to 10.00% and 5.25% 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 for the year ended December 31, 2004 and 2003 were $45,029 and
$15,262 respectively.
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.
11
SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN
EIN: 21-0682685
PLAN NUMBER 001
FORM 5500, SCHEDULE H, LINE 4 I
SCHEDULE OF ASSETS HELD AT END OF YEAR
DECEMBER 31, 2004
(a) (b) (c) (d) (e)
CURRENT
IDENTITY OF ISSUE DESCRIPTION COST VALUE
------------------------------------------------------ ------------------------------------ ----------- -----------
COMMON STOCK
* SL Industries, Inc. Common stock $ 2,021,272 $ 3,285,503
COMMON TRUST FUND
Fidelity Institutional Retirement Services Co., Inc. Blended Income Fund 3,594,459 3,594,459
Fidelity Institutional Retirement Services Co., Inc. Fidelity Puritan Fund 893,689 908,372
Fidelity Institutional Retirement Services Co., Inc. Fidelity Growth & Income Portfolio 1,559,325 1,514,440
Fidelity Institutional Retirement Services Co., Inc. Fidelity Low-Priced Stock Fund 1,697,212 2,389,825
Fidelity Institutional Retirement Services Co., Inc. Fidelity Diversified Int'l. Fund 473,331 583,329
Fidelity Institutional Retirement Services Co., Inc. Fidelity Mid-Cap Stock Fund 1,445,386 1,679,429
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom Income Fund 36,750 38,023
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2000 Fund 209,343 210,576
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2010 Fund 514,625 534,438
Fidelity Institutional Retirement Services Co., Inc Fidelity Freedom 2015 Fund 12,870 13,325
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2020 Fund 928,344 968,666
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2030 Fund 499,420 541,748
Fidelity Institutional Retirement Services Co., Inc Fidelity Freedom 2025 Fund 2,173 2,186
Fidelity Institutional Retirement Services Co., Inc Fidelity Freedom 2035 Fund 5,652 5,732
Fidelity Institutional Retirement Services Co., Inc. Spartan US Equity Index Fund 1,340,772 1,423,674
Fidelity Institutional Retirement Services Co., Inc. Fidelity US Bond Index Fund 442,997 449,043
* Participant Loans Receivable Loans, ranging 1-10 years maturity
with interest rates of 4.75%-10.00% - 351,826
----------- -----------
$15,677,620 $18,494,594
=========== ===========
* A party-in-interest as defined by ERISA
12
Exhibit Index
Number Description
23.1 Consent of Independent Registered Public Accounting Firm, Sobel & Co.,
LLC for the year ended December 31, 2004.
13