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, 2005 and 2004
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
Plan Administrator
By: /s/ David R. Nuzzo
------------------------------------
David R. Nuzzo
June 28, 2006
2
SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
PAGES
-----
Report of Independent Registered Public Accounting
Firm for the years ended December 31, 2005 and 2004 4
Financial Statements:
Statements of Net Assets Available for Benefits
December 31, 2005 and December 31, 2004 5
Statements of Changes in Net Assets Available for Benefits
for the years ended December 31, 2005 and 2004 6
Notes to Financial Statements 7-11
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets Held at end of year
December 31, 2005 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, 2005 and 2004, and the related statements of changes in net assets available
for benefits for the years ended December 31, 2005 and 2004. 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,
2005 and 2004 and the changes in net assets available for benefits for the years
ended December 31, 2005 and 2004, 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 financial statements
taken as a whole.
/s/ Sobel & Co., LLC
Livingston, New Jersey
May 3, 2006
4
SL INDUSTRIES, INC.
SAVINGS AND PENSION PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
-------------------------
2005 2004
----------- -----------
INVESTMENTS $20,153,765 $18,494,594
----------- -----------
RECEIVABLES
Employer contributions 301,244 280,382
Participant contributions 79,559 73,093
----------- -----------
TOTAL RECEIVABLES 380,803 353,475
----------- -----------
CASH 53,226 37,838
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $20,587,794 $18,885,907
=========== ===========
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
Year Ended December 31,
-------------------------
2005 2004
----------- -----------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
INVESTMENT INCOME:
Net appreciation in fair value of investments $ 809,133 $ 2,239,317
Net realized gain on sale of investments 76,581 126,430
Interest/dividends 769,318 455,447
CONTRIBUTIONS:
Employer 652,472 572,830
Participant 1,070,925 963,044
Rollover 49,931 --
----------- -----------
TOTAL ADDITIONS: 3,428,360 4,357,068
----------- -----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 1,676,669 1,653,275
Administrative expenses 49,804 45,029
----------- -----------
TOTAL DEDUCTIONS 1,726,473 1,698,304
----------- -----------
NET INCREASE 1,701,887 2,658,764
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 18,885,907 16,227,143
----------- -----------
End of year $20,587,794 $18,885,907
=========== ===========
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 of America 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: Managed Income Portfolio, Puritan Fund, Growth and Income Portfolio,
Low-Priced Stock Fund, Diversified International Fund, Mid-Cap Stock Fund,
Freedom Income Fund, Freedom 2000 Fund, Freedom 2005 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 Managed Income Portfolio represents a deposit contract with Fidelity's
Managed Income Fund. 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 contributed 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 2005 and 2004, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $885,714 and $2,365,747 as follows:
2005 2004
-------- ----------
Mutual funds $382,118 $ 925,470
Common stock 503,596 1,440,277
-------- ----------
$885,714 $2,365,747
======== ==========
The following table represents investments that represent 5% or more of the
Plan's net assets:
December 31,
-----------------------
2005 2004
---------- ----------
Fidelity Managed Income Portfolio $3,242,012 $3,594,459
*SL Industries, Inc. Common Stock 3,757,385 3,285,503
Fidelity Growth and Income Portfolio 1,556,562 1,514,440
Fidelity Low Priced Stock Fund 2,594,708 2,389,825
Fidelity Mid-Cap Stock Fund 2,103,739 1,679,429
Spartan U.S. Equity Index Fund 1,525,309 1,423,674
Fidelity Freedom 2020 1,126,165 968,666
* 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,:
2005 2004
-------- ----------
Changes in net assets:
Contributions $415,369 $ 346,882
Net appreciation 503,596 1,440,277
Benefits paid to participants (112,615) (205,460)
Transfer/loan activity (334,468) (313,258)
-------- ----------
Net changes $471,882 $1,268,441
======== ==========
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
$14,000 and $13,000 in the calendar years 2005 and 2004, 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 contributed 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 are used to pay plan administrative expenses.
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, 2005 and December 31, 2004
range from 4.75% to 10.00%. 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 administrative expenses
paid by the Plan for the years ended December 31, 2005 and 2004 were
$49,804 and $45,029, respectively.
5. TAX STATUS
The Internal Revenue Service has issued a favorable determination letter,
dated June 9, 2005, 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.
6. PLAN AMENDMENTS
Effective January 1, 2006 the Plan was amended to require consent to
distribute amounts of over $1,000. Previously the requirement was $5,000.
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, 2005
(E)
(B) (C) (D) CURRENT
(A) IDENTITY OF ISSUE DESCRIPTION COST VALUE
--- ---------------------------------------------------- ------------------------------------ ----------- -----------
COMMON STOCK
* SL Industries, Inc. Common stock $ 2,250,753 $ 3,757,385
COMMON TRUST FUND
Fidelity Institutional Retirement Services Co., Inc. Managed Income Portfolio 3,242,012 3,242,012
Fidelity Institutional Retirement Services Co., Inc. Fidelity Puritan Fund 1,019,940 1,023,040
Fidelity Institutional Retirement Services Co., Inc. Fidelity Growth and Income Portfolio 1,754,792 1,556,562
Fidelity Institutional Retirement Services Co., Inc. Fidelity Low-Priced Stock Fund 1,990,040 2,594,708
Fidelity Institutional Retirement Services Co., Inc. Fidelity Diversified Int'l. Fund 723,294 912,584
Fidelity Institutional Retirement Services Co., Inc. Fidelity Mid-Cap Stock Fund 1,676,485 2,103,739
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom Income Fund 44,745 46,434
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2000 Fund 143,403 146,042
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2005 Fund 1,630 1,592
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2010 Fund 514,977 547,393
Fidelity Institutional Retirement Services Co., Inc Fidelity Freedom 2015 Fund 38,042 40,062
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2020 Fund 1,033,834 1,126,165
Fidelity Institutional Retirement Services Co., Inc Fidelity Freedom 2025 Fund 19,676 20,818
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2030 Fund 567,816 647,322
Fidelity Institutional Retirement Services Co., Inc Fidelity Freedom 2035 Fund 13,236 13,656
Fidelity Institutional Retirement Services Co., Inc. Spartan US Equity Index Fund 1,405,916 1,525,309
Fidelity Institutional Retirement Services Co., Inc. Fidelity US Bond Index Fund 429,598 425,239
* Participant Loans Receivable Loans, ranging 1-10 years maturity
with interest rates of 4.75%-10.00% -- 423,703
----------- -----------
$16,870,189 $20,153,765
=========== ===========
* 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, 2005.
13