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 [FEE REQUIRED]
For the fiscal year ended December 31, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [ NO FEE REQUIRED]
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 plan) have duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
SL INDUSTRIES, INC.
Plan Administrator
By: /s/ David R. Nuzzo
------------------
David R. Nuzzo
Vice President, Finance & Administrator
June 24, 2003
2
SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
PAGES
-----
Report of Independent Public Accountants
for the year ended December 31, 2002 4
Financial Statements:
Statements of Net Assets Available for Benefits
December 31, 2002 and December 31, 2001 5
Statement of Changes in Net Assets Available for Benefits
for the year ended December 31, 2002 6
Notes to Financial Statements 7-11
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets Held for
Investment Purposes - December 31, 2002 12
Exhibit Index 13
3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator
SL Industries, Inc. Savings and Pension Plan:
We have audited the accompanying statements of net assets available for benefits
of the SL Industries, Inc. Savings and Pension Plan as of December 31, 2002 and
2001, and the related statement of changes in net assets available for benefits
for the year ended December 31, 2002. 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 audit.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes 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,
2002 and 2001 and the changes in net assets available for benefits for the year
ended December 31, 2002, in conformity with accounting principles generally
accepted in the United States of America.
Our audit was 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/ Goldenberg Rosenthal, LLP
Jenkintown, PA
June 5, 2003
4
SL INDUSTRIES, INC.
SAVINGS AND PENSION PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31
----------------------------
2002 2001
----------- -----------
(as adjusted)
INVESTMENTS $12,445,397 $13,941,098
RECEIVABLES
Employer contributions 260,967 310,274
Participant contributions 47,849 57,488
----------- -----------
TOTAL RECEIVABLES 308,816 367,762
----------- -----------
CASH 16,512 28,161
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $12,770,725 $14,337,021
=========== ===========
Note: The accompanying notes are an integral part of these financial statements.
5
SL INDUSTRIES, INC.
SAVINGS AND PENSION PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended
December 31, 2002
-----------------
ADDITIONS (REDUCTIONS) TO NET ASSETS ATTRIBUTED TO:
INVESTMENT INCOME:
Net depreciation in fair value of investments $ (1,464,271)
Interest/dividends 345,365
Net realized loss on sales of investments (88,057)
------------
(1,206,963)
------------
CONTRIBUTIONS:
Employer 558,155
Participant 872,037
Rollover 8,924
------------
1,439,116
------------
TOTAL ADDITIONS 232,153
------------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits Paid to Participants 1,797,245
Administrative Expenses 1,204
------------
TOTAL DEDUCTIONS 1,798,449
------------
NET DECREASE (1,566,296)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of Year 14,337,021
------------
End of Year $ 12,770,725
============
Note: 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, SL Surface Technologies Inc., Condor D.C.
Power Supplies, Inc., SL Montevideo Technology, Inc., and SLW Holdings,
Inc. (first month of the year in 2001). To become eligible for the
plan, an individual would have to have attained the age of 18 on the
first day of the month coinciding with or following the date of hire.
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 fourteen 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 2020 Fund, Freedom 2030 Fund, Spartan U.S.
Equity Index Fund, U.S. Bond Index Fund and Money Market 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 New York Stock Exchange.
The Plan presents in the statement of changes in net assets available
for benefits the net depreciation 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 2002, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year)
depreciated in value by $1,552,328 as follows:
Mutual funds $ 1,435,589
Common Stock 116,739
----------------
$ 1,552,328
----------------
The following table represents investments that represent 5% or more of
the Plan's net assets:
December 31
--------------------------
2002 2001
---------- ----------
Blended Income Fund $3,539,701 $3,294,441
SL Industries, Inc. Common Stock* 1,238,843 1,313,922
Fidelity Growth and Income Portfolio 1,094,635 1,408,216
Fidelity Low Priced Stock Fund 1,284,594 1,549,482
Fidelity Mid-Cap Stock Fund 998,387 1,570,482
Spartan U.S. Equity Index Fund 860,151 1,059,777
* 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, 2002 and 2001:
December 31
---------------------------
Changes in net assets 2002 2001
--------- -----------
Contributions $ 651,127 $ 1,131,975
Dividends 39 1,301
Net depreciation (116,739) (1,222,581)
Benefits paid to participants (205,900) (234,938)
Transfer/loan activity (403,606) (901,177)
--------- -----------
Net changes $ (75,079) $(1,225,420)
--------- -----------
CONTRIBUTIONS
ELECTIVE CONTRIBUTIONS
Employees' contributions are based upon authorized payroll
withholdings. Participants may make elective deferrals of up to an
annual maximum of the lesser of 20% of their annual compensation, as
defined by the Plan, or $11,000 in the calendar year of 2002, 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, 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.
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, 2002 and
December 31, 2001 range from 4.75% to 10.25% and 5.5% 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 of the Plan have been paid by SL Industries,
Inc., with the exception of asset management fees, which have been paid
by the Plan. Total asset management fees expensed in the fiscal years
ended December 31, 2002 and December 31, 2001 were $1,204 and $1,973,
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. Although the Plan has been amended since receiving
the determination letter, management believes that they are operating
the Plan in accordance with the Code. Accordingly, there is no
provision for income taxes in the accompanying financial statements.
11
SL INDUSTRIES, INC. SAVINGS AND PENSION PLAN
FEIN: 21-0682685
PLAN NUMBER 001
FORM 5500, SCHEDULE H, LINE 4 i
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 2002
(e) Current
(a) (b) Identity of Issuer (c) Description of Investment (d) Cost Value
--- ------------------------------------------------- ----------------------------- ---------- -----------
Common Stock
* SL Industries, Inc. Common Stock 1,914,237 1,238,843
Common Trust Fund
Fidelity Institutional Retirement Services Co., Inc. Blended Income Fund 3,539,701 3,539,701
Fidelity Institutional Retirement Services Co., Inc. Fidelity Puritan Fund 686,847 567,819
Fidelity Institutional Retirement Services Co., Inc. Fidelity Growth & Income Portfolio 1,504,575 1,094,635
Fidelity Institutional Retirement Services Co., Inc. Fidelity Low-Priced Stock Fund 1,285,449 1,284,594
Fidelity Institutional Retirement Services Co., Inc. Fidelity Diversified Int'l Fund 294,161 242,868
Fidelity Institutional Retirement Services Co., Inc. Fidelity Mid-Cap Stock Fund 1,248,027 998,387
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom Income Fund 63,523 62,157
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2000 Fund 233,157 213,030
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2010 Fund 636,173 546,709
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2020 Fund 810,177 627,682
Fidelity Institutional Retirement Services Co., Inc. Fidelity Freedom 2030 Fund 461,963 346,267
Fidelity Institutional Retirement Services Co., Inc. Spartan U.S. Equity Index Fund 1,176,669 860,151
Fidelity Institutional Retirement Services Co., Inc. Fidelity U.S. Bond Index Fund 445,255 460,279
* Participant Loans Receivable Loans, ranging 1-10 years maturity
with interest rates of 4.75%-10.25% 362,275 362,275
---------- ----------
14,662,189 12,445,397
========== ==========
* A party-in-interest as defined by ERISA.
12
Exhibit Index
Number Description
23.1 Consent of Independent Accountants, Goldenberg Rosenthal, LLP for the year ended
December 31, 2002