SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 18, 2002
SL INDUSTRIES, INC.
(Exact name of issuer as specified in its charter)
New Jersey 1-4987 21-0682685
(STATE OR OTHER JURISDICTION OF (COMMISSION (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) FILE NUMBER) IDENTIFICATION NUMBER)
520 Fellowship Road, Suite A114
Mount Laurel, New Jersey 08054
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
(856) 727-1500
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On July 18, 2002, SL Industries, Inc. (the "Company") announced that it
dismissed Arthur Andersen LLP ("Andersen") as its independent accountants and
engaged Grant Thornton LLP as its new independent accountants. The decision to
dismiss Andersen and to engage Grant Thornton LLP was recommended by the Audit
Committee of the Company's Board of Directors and approved by the Company's
Board of Directors.
Andersen's reports on the Company's financial statements for the two years ended
December 31, 2000 and December 31, 2001 did not contain an adverse opinion or a
disclaimer of opinion, nor were they qualified or modified as to audit scope, or
accounting principles.
However, As a result of an impairment charge related to the write off of
intangible assets of a subsidiary of the Company recognized at December 31,
2001, the Company was in violation of its net income covenant for the fourth
quarter of 2001 under the Company's Revolving Credit Facility. Additionally, on
March 1, 2002 the Company received a notice from its lenders under the Revolving
Credit Facility stating that it is currently in default under the Revolving
Credit Facility due to its failure to meet a scheduled debt reduction.
Consequently, Andersen's report for the period ended December 31, 2001 dated
March 15, 2002 did contain the following paragraph: "The accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern. As discussed in Note 1 to the consolidated financial
statements, the Company was in technical default under its revolving credit
facility at December 31, 2001 and an additional event of default occurred on
March 1, 2002. Due to these events of default, the lenders that provide the
revolving credit facility do not have to provide any further financing and have
the right to terminate the facility and demand repayment of all amounts
outstanding. The existence of these events of default raises substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to this matter are also described in Note 1. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty."
On May 23, 2002, the Company and its lenders reached an agreement, pursuant to
which the lenders granted a waiver of default and amended certain financial
covenants of the Company's revolving credit facility, so that the Company is in
full compliance with the revolving credit facility after giving effect to the
Amendment. Additional information related to this matter is provided in the
Company's Form 8-K filed May 23, 2002.
During the Company's two most recent fiscal years and through the date of this
Form 8-K, there were no disagreements with Andersen on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure which, if not resolved to Andersen's satisfaction, would have caused
them to make reference to the subject matter in connection with their report on
the Company's consolidated financial statements for such years, and there were
no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.
The Company has provided Andersen with a copy of the foregoing disclosures and
requested Andersen furnish the Company a letter stating whether it agrees with
the statements herein. A copy of Andersen's letter will be filed by an amendment
to this report.
During the Company's two most recent fiscal years and the subsequent interim
periods through the date of this Form 8-K, the Company did not consult with
Grant Thornton LLP regarding the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Company's consolidated financial
statements, or any other matters or events as set forth in Item 304(a)(2)(i) or
(ii) of Regulation S-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit Number Description
-------------- -----------
16 Letter from Arthur Andersen LLP to the Securities and
Exchange Commission regarding a change in Certifying
Accountant. *
* To be filed by an amendment to this report.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
SL INDUSTRIES, INC.
Dated: July 22, 2002 By: /s/ David R. Nuzzo
------------------------------------
David R. Nuzzo
Vice President Finance and
Administration
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
16 Letter from Arthur Andersen LLP to the Securities and Exchange Commission. *
* to be filed by an amendment to this report.