SL Industries Announces 2006 Fourth Quarter and Year-End Results

SL Industries, Inc. announced that its net income for the year ended December 31, 2006 was $3,553,000, or $.61 per diluted share. Net income for the year included loss from discontinued operations, after tax, of $3,307,000, or $.57 per diluted share. Income for the year from continuing operations was $6,860,000, or $1.18 per diluted share. Discontinued operations include legacy costs associated with businesses divested by the company.

The exceptionally high loss from discontinued operations was attributable to a $2,480,000 reserve, net of tax, which was recorded in the fourth quarter in connection with certain estimated environmental liabilities. In addition to the environmental reserve, relative earnings decreased by $.64 per diluted share, compared to prior year, primarily as a result of an increase in the company’s effective tax rate to 33%, from 19% in 2005.

For the year ended December 31, 2005, net income was $7,147,000, or $1.25 per diluted share. The net income for 2005 included loss from discontinued operations of $473,000, or $.08 per diluted share. Income from continuing operations for 2005 was $7,620,000, or $1.33 per diluted share. Net sales from continuing operations for 2006 were $176,773,000, compared with net sales from continuing operations for 2005 of $126,873,000.

The company’s operating segments recorded mixed results, as compared to 2005. With the acquisition of Ault Incorporated in January 2006, SL Power Electronics Corp. recorded net sales of $87,949,000, with income from operations of $6,316,000, compared with net sales of $43,233,000 and income from operations of $4,543,000 for 2005. With the acquisition of MTE Corp. in October 2006, the High Power Group recorded net sales of $39,993,000, with income from operations of $5,836,000, compared with net sales of $32,777,000 and income from operations of $4,911,000 for 2005. In 2006, SL Montevideo Technology recorded net sales of $25,704,000, with income from operations of $1,555,000, compared with net sales of $28,085,000 and income from operations of $3,371,000 for 2005. RFL Electronics recorded net sales of $23,127,000, with income from operations of $2,217,000, compared with net sales of $22,778,000 and income from operations of $2,284,000 for 2005.

For the three months ended December 31, 2006, net loss was $1,148,000, or $.20 per diluted share. Loss from discontinued operations for the period was $2,862,000, or $.49 per diluted share. Income from continuing operations for the period was $1,714,000, or $.29 per diluted share. For the three months ended December 31, 2005, net income was $1,667,000, or $.29 per diluted share. Loss from discontinued operations for the period was $74,000, or $.01 per diluted share. Income from continuing operations for the period was $1,741,000, or $.30 per diluted share. Income from continuing operations benefited by approximately $.06 per diluted share due to foreign tax credits recorded during the quarter. Net sales from continuing operations for the three months ended December 31, 2006 were $49,209,000, compared with net sales from continuing operations of $31,060,000 for the same period last year.

In addition, the company announced that on March 23, 2007, the Board of Directors authorized the repurchase of up to 560,000 shares of its common stock. Any repurchases would be made if and when management considers appropriate and in open market or negotiated transactions.