10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-4987

SL INDUSTRIES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	21-0682685
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

520 Fellowship Road, Suite A114, Mt. Laurel, NJ	08054
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 856-727-1500

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer  ¨ Accelerated filer  ¨ Non-accelerated filer  ¨ Smaller reporting Company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes  ¨    No  x

The number of shares of common stock outstanding as of July 25, 2013 was 4,138,000.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets June 30, 2013 (Unaudited) and December 31, 2012		3
	Consolidated Statements of Income and Comprehensive Income Three Months Ended June  30, 2013 and 2012 (Unaudited) and Six Months Ended June 30, 2013 and 2012 (Unaudited)		4
	Consolidated Statements of Cash Flows (Unaudited)		5
	Notes to Consolidated Financial Statements (Unaudited)		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		54
Item 4.	Controls and Procedures		54
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		54
Item 1A.	Risk Factors		54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		55
Item 3.	Defaults Upon Senior Securities		55
Item 4.	Mine Safety Disclosures		55
Item 5.	Other Information		55
Item 6.	Exhibits		56
Signatures			57

Item 1. Financial Statements

SL INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2013			2012
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	974,000		$	3,196,000
Receivables, net		32,145,000			30,306,000
Inventories, net		24,675,000			22,102,000
Other current assets		3,152,000			2,098,000
Deferred income taxes, net		3,362,000			3,415,000
Total current assets		64,308,000			61,117,000
Property, plant and equipment, net		10,483,000			9,593,000
Deferred income taxes, net		9,700,000			9,719,000
Goodwill		22,726,000			22,735,000
Other intangible assets, net		2,450,000			2,670,000
Other assets and deferred charges, net		1,281,000			1,303,000
Total assets	$	110,948,000		$	107,137,000
LIABILITIES
Current liabilities:
Debt, current portion	$	2,490,000		$	—
Accounts payable		17,884,000			18,838,000
Accrued income taxes		—			429,000
Accrued liabilities:
Payroll and related costs		4,685,000			4,955,000
Other		10,671,000			10,586,000
Total current liabilities		35,730,000			34,808,000
Deferred compensation and supplemental retirement benefits		1,796,000			1,930,000
Other long-term liabilities		18,284,000			19,967,000
Total liabilities		55,810,000			56,705,000
Commitments and contingencies
SHAREHOLDERS’ EQUITY
Preferred stock, no par value; authorized, 6,000,000 shares; none issued		—			—
Common stock, $.20 par value; authorized, 25,000,000 shares; issued, 6,656,000 and 6,656,000 shares, respectively		1,331,000			1,331,000
Capital in excess of par value		21,814,000			21,578,000
Retained earnings		57,061,000			52,280,000
Accumulated other comprehensive (loss)		(359,000	)		(452,000	)
Treasury stock at cost, 2,510,000 and 2,517,000 shares, respectively		(24,709,000	)		(24,305,000	)
Total shareholders’ equity		55,138,000			50,432,000
Total liabilities and shareholders’ equity	$	110,948,000		$	107,137,000

See accompanying notes to consolidated financial statements.

3

SL INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
Net sales	$	49,786,000		$	48,899,000		$	98,881,000		$	98,239,000
Cost and expenses:
Cost of products sold		32,764,000			32,756,000			64,963,000			66,527,000
Engineering and product development		3,672,000			2,954,000			7,175,000			5,975,000
Selling, general and administrative		9,104,000			10,137,000			17,911,000			19,648,000
Depreciation and amortization		615,000			707,000			1,215,000			1,372,000
Total cost and expenses		46,155,000			46,554,000			91,264,000			93,522,000
Income from operations		3,631,000			2,345,000			7,617,000			4,717,000
Other income (expense):
Amortization of deferred financing costs		(20,000	)		(39,000	)		(39,000	)		(72,000	)
Interest income		2,000			2,000			3,000			3,000
Interest expense		(15,000	)		(9,000	)		(50,000	)		(31,000	)
Other gain (loss), net		(301,000	)		(162,000	)		(327,000	)		(170,000	)
Income from continuing operations before income taxes		3,297,000			2,137,000			7,204,000			4,447,000
Income tax provision		1,045,000			727,000			1,968,000			1,593,000
Income from continuing operations		2,252,000			1,410,000			5,236,000			2,854,000
(Loss) from discontinued operations, net of tax		(237,000	)		(244,000	)		(455,000	)		(438,000	)
Net income	$	2,015,000		$	1,166,000		$	4,781,000		$	2,416,000
Basic net income (loss) per common share
Income from continuing operations	$	0.54		$	0.32		$	1.26		$	0.64
(Loss) from discontinued operations, net of tax		(0.06	)		(0.06	)		(0.11	)		(0.10	)
Net income	$	0.48		$	0.26		$	1.15		$	0.54
Diluted net income (loss) per common share
Income from continuing operations	$	0.54		$	0.32		$	1.25		$	0.63
(Loss) from discontinued operations, net of tax		(0.06	)		(0.06	)		(0.11	)		(0.10	)
Net income	$	0.48		$	0.26		$	1.14		$	0.53
Shares used in computing basic net income (loss) per common share		4,157,000			4,444,000			4,148,000			4,501,000
Shares used in computing diluted net income (loss) per common share		4,204,000			4,457,000			4,189,000			4,518,000

SL INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2013		2012			2013		2012
Net income	$	2,015,000	$	1,166,000		$	4,781,000	$	2,416,000
Other comprehensive income, net of tax:
Foreign currency translation		17,000		(113,000	)		93,000		(94,000	)
Comprehensive income	$	2,032,000	$	1,053,000		$	4,874,000	$	2,322,000

See accompanying notes to consolidated financial statements.

4

SL INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30,

(Unaudited)

	2013			2012
OPERATING ACTIVITIES:
Net income	$	4,781,000		$	2,416,000
Adjustment for losses from discontinued operations		455,000			438,000
Income from continuing operations		5,236,000			2,854,000
Adjustments to reconcile income from continuing operations to net cash (used in) provided by operating activities:
Depreciation		918,000			892,000
Amortization		297,000			480,000
Amortization of deferred financing costs		39,000			72,000
Stock-based compensation		332,000			744,000
Excess tax benefit on stock compensation		(35,000	)		—
Loss on foreign exchange contracts		327,000			170,000
Provisions for losses on accounts receivable		34,000			40,000
Deferred compensation and supplemental retirement benefits		132,000			201,000
Deferred compensation and supplemental retirement benefit payments		(260,000	)		(269,000	)
Deferred income taxes		70,000			(293,000	)
Loss on sale of equipment		—			11,000
Changes in operating assets and liabilities, excluding effects of business combinations:
Accounts receivable		(1,820,000	)		3,297,000
Inventories		(2,507,000	)		(503,000	)
Other assets		(1,049,000	)		(1,004,000	)
Accounts payable		(1,045,000	)		1,216,000
Other accrued liabilities		335,000			3,333,000
Accrued income taxes		(383,000	)		10,000
Net cash provided by operating activities from continuing operations		621,000			11,251,000
Net cash (used in) operating activities from discontinued operations		(2,934,000	)		(513,000	)
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES		(2,313,000	)		10,738,000
INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(1,801,000	)		(879,000	)
Acquisition of a business, net of cash acquired		—			(756,000	)
Purchases of other assets		(62,000	)		(155,000	)
NET CASH (USED IN) INVESTING ACTIVITIES		(1,863,000	)		(1,790,000	)
FINANCING ACTIVITIES:
Proceeds from Senior Revolving Credit Facility		13,550,000			—
Payments of Senior Revolving Credit Facility		(11,060,000	)		—
Proceeds from Revolving Credit Facility		—			3,900,000
Payments of Revolving Credit Facility		—			(3,900,000	)
Payments of deferred financing costs		(30,000	)		(43,000	)
Repurchase and retirement of common stock		—			(4,177,000	)
Treasury stock purchases		(792,000	)		(2,468,000	)
Proceeds from stock options exercised		227,000			—
Excess tax benefit on stock compensation		35,000			—
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		1,930,000			(6,688,000	)
Effect of exchange rate changes on cash		24,000			(1,000	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(2,222,000	)		2,259,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		3,196,000			5,632,000
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	974,000		$	7,891,000
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest	$	49,000		$	32,000
Income taxes	$	2,445,000		$	1,622,000

See accompanying notes to consolidated financial statements.

5

SL INDUSTRIES, INC.

Notes to Consolidated Financial Statements (Unaudited)

1. Basis Of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation. Operating results for interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. These financial statements should be read in conjunction with the Company’s audited financial statements and notes thereon included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. Unless the context requires otherwise, the terms the “Company,” “SL Industries,” “we,” “us” and “our” mean SL Industries, Inc., a Delaware corporation, and its consolidated subsidiaries after Reincorporation (defined and described below) and SL Industries, Inc., a New Jersey corporation prior to Reincorporation. In the context of describing the Reincorporation, “SL-NJ” means SL Industries, Inc., a New Jersey corporation, and “SL-DE” means SL Industries, Inc., a Delaware corporation and wholly owned subsidiary of SL-NJ.

On May 9, 2013, the Company’s shareholders voted to approve a proposal to change the state of incorporation of SL Industries from the State of New Jersey to the State of Delaware by merging SL-NJ with and into SL-DE (the “Reincorporation”). On June 20, 2013 (the “Effective Date”), the Reincorporation was effected by merging SL-NJ with and into SL-DE pursuant to an Agreement and Plan of Merger, dated June 3, 2012, between SL-NJ and SL-DE. SL-DE survived the merger and SL-NJ ceased to exist. The principal reason for the Reincorporation was to give the Company a greater measure of flexibility and simplicity in corporate governance and provide greater clarity and predictability with respect to the Company’s corporate legal affairs. The Reincorporation did not result in any change in the name, business, management, fiscal year, accounting, location of the principal executive officers, assets or liabilities or net worth (other than the costs of reincorporation which were immaterial) of the Company.

2. Receivables

Receivables consist of the following:

	June 30,			December 31,
	2013			2012
	(in thousands)
Trade receivables	$	29,907		$	29,284
Less: allowance for doubtful accounts		(625	)		(591	)
Trade receivables, net		29,282			28,693
Other		2,863			1,613
Receivables, net	$	32,145		$	30,306

6

3. Inventories

Inventories consist of the following:

	June 30,			December 31,
	2013			2012
	(in thousands)
Raw materials	$	17,510		$	15,726
Work in process		5,989			4,623
Finished goods		4,143			4,819
Gross inventory		27,642			25,168
Less: allowances		(2,967	)		(3,066	)
Inventories, net	$	24,675		$	22,102

4. Income Per Share

The Company has presented net income per common share pursuant to Accounting Standards Codification (“ASC”) 260 “Earnings Per Share.” Basic net income per common share is computed by dividing reported net income available to common shareholders by the weighted average number of shares outstanding for the period.

Diluted net income per common share is computed by dividing reported net income available to common shareholders by the weighted average shares outstanding for the period, adjusted for the dilutive effect of common stock equivalents, which consist of stock options, using the treasury stock method.

7

The table below sets forth the computation of basic and diluted net income per share:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands, except per share amounts)
Basic net income available to common shareholders:
Net income available to common shareholders from continuing operations	$	2,252		$	1,410		$	5,236		$	2,854
Diluted net income available to common shareholders from continuing operations	$	2,252		$	1,410		$	5,236		$	2,854
Shares:
Basic weighted average number of common shares outstanding		4,157			4,444			4,148			4,501
Common shares assumed upon exercise of stock options		47			13			41			17
Diluted weighted average number of common shares outstanding		4,204			4,457			4,189			4,518
Basic net income (loss) per common share:
Income from continuing operations	$	0.54		$	0.32		$	1.26		$	0.64
(Loss) from discontinued operations (net of tax)		(0.06	)		(0.06	)		(0.11	)		(0.10	)
Net income	$	0.48		$	0.26		$	1.15		$	0.54
Diluted net income (loss) per common share:
Income from continuing operations	$	0.54		$	0.32		$	1.25		$	0.63
(Loss) from discontinued operations (net of tax)		(0.06	)		(0.06	)		(0.11	)		(0.10	)
Net income	$	0.48		$	0.26		$	1.14		$	0.53

For the three and six months ended June 30, 2013, no stock options were excluded from the dilutive computation because the option exercise prices were not greater than the average market price of the Company’s common stock.

For the three and six months ended June 30, 2012, 7,000 and 6,000 stock options were excluded from the dilutive computation, respectively, because the option exercise prices were greater than the average market price of the Company’s common stock.

5. Stock-Based Compensation

At June 30, 2013, the Company had stock-based employee compensation plans as described below. The total compensation expense (included in selling, general and administrative expense) related to these plans for the three and six months ended June 30, 2013 was $210,000 and $332,000 ($148,000 and $241,000, net of tax), respectively. For the three and six months ended June 30, 2012, the total compensation expense was $595,000 and $744,000 ($385,000 and $477,000, net of tax), respectively.

8

On May 14, 2008, the shareholders approved the 2008 Incentive Stock Plan (the “2008 Plan”). The 2008 Plan was proposed to create an additional incentive to retain directors, key employees and advisors of the Company. Prior to the amendment of the 2008 Plan on June 8, 2011, as described below, up to 315,000 shares of the Company’s common stock were subject to the 2008 Plan. Options granted under the 2008 Plan are required to stipulate an exercise price per share of not less than the fair market value of the Company’s common stock on the business day immediately prior to the date of the grant. Options granted under the 2008 Plan are exercisable no later than ten years after the grant date.

During 2011, the shareholders of the Company approved amendments to the 2008 Plan to: (a) increase the number of shares of the Company’s common stock subject to the 2008 Plan from 315,000 shares to 450,000 shares, and (b) require shareholder approval prior to the reduction of the exercise price of any outstanding options or stock appreciation rights, any repricing through cancellations and re-grants of new options or stock appreciation rights, or any cancellation of outstanding options or stock appreciation rights with an exercise price above the current stock price in exchange for cash or other securities. No stock options were granted to select executives and key employees under the 2008 Plan during the six months ended June 30, 2013. As of June 30, 2013, there were 117,000 options outstanding under the 2008 Plan. As of June 30, 2013, there were 116,000 shares available for grant under the 2008 Plan.

During the second quarter of 2011, the Company implemented a Long-Term Incentive Plan (the “2011 LTIP”) pursuant to the 2008 Plan which awarded restricted stock units (“RSUs”) to eligible executives. Under the terms of the 2011 LTIP, the number of RSUs that may vest, if any, will be based on, among other things, the Company achieving certain sales and return on invested capital (“ROIC”), as defined, targets during the January 2011 to December 2013 performance period. Earned RSUs, if any, cliff vest at the end of fiscal 2013 (100% of earned RSUs vest at December 31, 2013). The final value of these RSUs will be determined by the number of shares earned. The value of these RSUs is charged to compensation expense on a straight-line basis over the three year vesting period with periodic adjustments to account for changes in anticipated award amounts. The weighted-average price for these RSUs was $23.00 per share based on the grant date of June 9, 2011. During the three months ended and six months ended June 30, 2013, $32,000 and $52,000 was charged to compensation expense, respectively. As of June 30, 2013, total unamortized compensation expense for this grant was $48,000. As of June 30, 2013, the maximum number of achievable RSUs under the 2011 LTIP is 36,000 RSUs.

During the first quarter of 2012, the Company implemented a Long-Term Incentive Plan (the “2012 LTIP”) pursuant to the 2008 Plan which had similar conditions and vesting terms as the 2011 LTIP. The weighted-average price for these RSUs was $18.00 per share based on the grant date of February 17, 2012. During the three months ended and six months ended June 30, 2013, $19,000 and $29,000 was charged to compensation expense, respectively. As of June 30, 2013, total unamortized compensation expense for this grant was $84,000. As of June 30, 2013, the maximum number of achievable RSUs under the 2012 LTIP was 54,000 RSUs.

9

On April 2, 2012, the Company granted each Director, except the Chairman, 3,000 restricted shares pursuant to the 2008 Plan. The Chairman was granted 10,000 restricted shares pursuant to the 2008 Plan. The shares vest upon the earlier to occur of the first anniversary of the grant date or at the discretion of the Compensation Committee, upon the Director ending his continuous service as a director of the Company. Based on the terms of the awards the shares were immediately expensed and as a result the Company recognized $431,000 of stock compensation expense during the second quarter of 2012. The weighted-average price of these restricted stock grants was $19.57 per share based on the grant date of April 2, 2012. All shares vested and were granted under this award on April 2, 2013.

During the first quarter of 2013, the Company implemented a Long-Term Incentive Plan (the “2013 LTIP”) pursuant to the 2008 Plan which had similar conditions and vesting terms as the 2011 LTIP. The weighted-average price for these RSUs was $19.17 per share based on the grant date of March 5, 2013. During the three and six months ended June 30, 2013, $33,000 and $43,000 was charged to compensation expense, respectively. As of June 30, 2013, total unamortized compensation expense for this grant was $336,000. As of June 30, 2013, the maximum number of achievable RSUs under the 2013 LTIP was 28,000 RSUs.

On May 9, 2013, the Company granted each Director 3,000 restricted shares pursuant to the 2008 Plan. The shares vest upon the first anniversary of the grant date. Based on the terms of the awards the value of these restricted shares is charged to compensation expense on a straight-line basis over the one year vesting period. As a result, the Company recognized $45,000 of stock compensation expense during the second quarter of 2013. As of June 30, 2013, total unamortized compensation expense for this grant was $264,000. The weighted-average price of these restricted stock grants was $20.60 per share based on the grant date of May 9, 2013. As of June 30, 2013, no shares were granted under this award.

Stock Options

Option activity under the principal option plans as of June 30, 2013 and changes during the six months ended June 30, 2013 were as follows:

	Outstanding Options			Weighted Average Exercise Price		Weighted Average Remaining Life		Aggregate Intrinsic Value
	(in thousands)					(in years)		(in thousands)
Outstanding as of December 31, 2012		135		$	12.79		4.33	$	670
Granted		—			—
Exercised		(18	)		12.65
Forfeited		—			—
Expired		—			—
Outstanding as of June 30, 2013		117		$	12.81		3.93	$	1,436
Exercisable as of June 30, 2013		102		$	12.57		3.88	$	1,276

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The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the second quarter of fiscal 2013 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2013. This amount changes based on the fair market value of the Company’s stock. The total intrinsic value of options exercised for the six months ended June 30, 2013 was $185,000. No options were exercised during the six months ended June 30, 2012.

As of June 30, 2013, $34,000 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 0.4 years.

Tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options are classified as financing cash flows. Cash received from option exercises for the six months ended June 30, 2013 was $227,000. The actual tax benefit realized for the tax deduction from option exercises of share-based payment arrangements totaled $70,000 for the six months ended June 30, 2013. No options were exercised during the six months ended June 30, 2012. The Company has applied the “Short-cut” method in calculating the historical windfall tax benefits. All tax shortfalls will be applied against this windfall before being charged to earnings.

6. Income Tax

The Company calculates its interim tax provision in accordance with the provisions of ASC 740-270 “Income Taxes – Interim Reporting.” For each interim period the Company estimates its annual effective income tax rate and applies the estimated rate to its year-to-date income or loss before income taxes. The Company also computes the tax provision or benefit related to items separately reported, such as discontinued operations, and recognizes the items net of their related tax effect in the interim periods in which they occur. The Company also recognizes the effect of changes in enacted tax laws or rates in the interim periods in which the changes occur.

For the six months ended June 30, 2013 and June 30, 2012, the estimated income tax rate from continuing operations was 27% and 36%, respectively. The decrease in the effective tax rate was due to an increase in international rate differences and foreign tax credits, which were partially offset by certain permanent adjustments. The effective tax rate also decreased due to the recording of a research and development tax benefit of $594,000 in 2013, which was primarily related to the retroactive reinstatement of the federal research and development tax credits from the enactment of the American Tax Relief Act of 2012. These credits were not available to the Company in 2012.

During the three months ended June 30, 2013, the Company recorded additional benefits from federal and state research and development tax credits of $196,000 and $65,000, respectively. During the six months ended June 30, 2013, the Company recorded additional benefits from federal and state research and development tax credits of $496,000 and $98,000, respectively. The Company did not record additional benefits from federal research and development tax credits during the three and six months ended June 30, 2012.

As of June 30, 2013, the Company’s gross research and development tax credit carryforwards totaled approximately $1,294,000. Of these credits, approximately $610,000 ($200,000 federal and $410,000 state) can be carried forward for 15 years and will expire between 2014 and 2028, and approximately $685,000 of state credits can be carried forward indefinitely.

11

The Company has recorded gross unrecognized tax benefits, excluding interest and penalties, as of June 30, 2013 and December 31, 2012 of $710,000 and $595,000, respectively. Tax benefits are recorded pursuant to the provisions of ASC 740 “Income Taxes.” If such unrecognized tax benefits are ultimately recorded in any period, the Company’s effective tax rate would be reduced accordingly for such period.

The Company has been examined by the Internal Revenue Service (the “IRS”) through the calendar year 2010. State income tax statutes are generally open for periods back to and including the calendar year 2008.

It is reasonably possible that the Company’s gross unrecognized tax benefits balance may change within the next twelve months due to the expiration of the statutes of limitation of the federal government and various state governments by a range of zero to $38,000. The Company records such unrecognized tax benefits upon the expiration of the applicable statute of limitations or the settlement with tax authorities. As of June 30, 2013, the Company has a liability for unrecognized benefits of $433,000 for federal taxes and $277,000 for state taxes. Such benefits relate primarily to expenses incurred in those jurisdictions.

The Company classifies interest and penalties related to unrecognized tax benefits as income tax expense. At June 30, 2013, and December 31, 2012, the Company has accrued approximately $82,000 and $62,000 for the payment of interest and penalties, respectively.

7. Recently Adopted and Issued Accounting Pronouncements

In July 2012, the FASB issued ASU 2012-02 “Intangibles-Goodwill and Other: Testing Indefinite-Lived Intangible Assets for Impairment,” which amends the guidance on impairment testing for indefinite-lived intangible assets. The amended guidance will allow companies to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. A company no longer will be required to test the fair value of an intangible asset unless the company determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. ASU 2012-02 is effective for interim and annual periods beginning after September 15, 2012. The implementation of this guidance did not have a material impact on the Company’s consolidated financial statements.

In October 1, 2012, the FASB issued ASU 2012-04 “Technical Corrections and Improvements,” which makes certain technical corrections and improvements and conforming amendments related to fair value measurements. The amendments represent changes to clarify, correct unintended application of, or make minor improvements to the FASB Accounting Standards Codification that are not expected to have a significant effect on current accounting practice. ASU 2012-04 is effective for fiscal periods beginning after December 15, 2012. The implementation of this guidance did not have a material impact on the Company’s consolidated financial statements.

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In February 2013, the FASB issued ASU No. 2013-02, “Comprehensive Income (Topic 220) – Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income,” which requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety in the same reporting period. ASU 2013-02 is effective for fiscal periods beginning after December 15, 2012. The implementation of this guidance did not have a material impact on the Company’s consolidated financial statements.

In March 2013, the FASB issued ASU No. 2013-05, “Foreign Currency Matter (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity a consensus of the FASB Emerging Issues Task Force,” which permits an entity to release cumulative translation adjustments into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided, or, if a controlling financial interest is no longer held. ASU 2013-05 is effective for fiscal periods beginning after December 15, 2013. The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force),” which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. ASU 2013-11 is effective for fiscal periods beginning after December 15, 2013. The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

8. Goodwill And Intangible Assets

Acquisition in Fiscal 2012

On February 27, 2012, the Company purchased certain assets of Pro-Dex Astromec, Inc. (“Astromec”), a subsidiary of Pro-Dex Inc. (“Pro-Dex”), for approximately $1,050,000, which includes the assumption of liabilities for an estimated earn-out of $294,000. The acquisition was paid for in cash. SL Montevideo Technology, Inc. (“SL-MTI”) recorded direct acquisition costs of approximately $422,000 and $434,000 during the six months ended June 30, 2012 and during the twelve months ended December 31, 2012, respectively. Direct acquisition costs were recorded within selling, general and administrative expenses in the Consolidated Statements of Income.

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At December 31, 2012, the financial statements reflected the final purchase price based on estimated fair values at the date of acquisition, including $670,000 in inventories, $202,000 in equipment, and $10,000 in other current assets. The acquisition resulted in intangible assets of $168,000 while no goodwill was recognized. Intangible assets were composed of a customer list with a useful life of 5 years. The purchase price also included $294,000 in liabilities related to an estimated earn-out, which is comprised of quarterly payments based on the performance of the acquired business over the three year period immediately following the date of acquisition. The total liability for the earn-out as of June 30, 2013 and December 31, 2012 was $158,000 and $221,000, respectively. During 2013, $88,000 was paid related to the earn-out. The results from the acquisition date through June 30, 2013 are included in the SL-MTI segment.

Goodwill And Intangible Assets

Intangible assets consist of the following:

	Amortizable Life (years)	June 30, 2013						December 31, 2012
		Gross Value		Accumulated Amortization		Net Value		Gross Value		Accumulated Amortization		Net Value
		(in thousands)
Finite-lived intangible assets:
Customer relationships (1)	5 to 8	$	3,868	$	3,257	$	611	$	3,868	$	3,078	$	790
Patents (2)	5 to 20		1,287		1,203		84		1,285		1,187		98
Developed technology	5 to 6		1,700		1,700		—		1,700		1,700		—
Licensing fees	5 to 10		450		367		83		450		340		110
Total amortized finite-lived intangible assets			7,305		6,527		778		7,303		6,305		998
Indefinite-lived intangible assets:
Trademarks			1,672		—		1,672		1,672		—		1,672
Other intangible assets, net		$	8,977	$	6,527	$	2,450	$	8,975	$	6,305	$	2,670

⁽¹⁾  On February 27, 2012, the Company purchased certain assets of Astromec, a subsidiary of Pro-Dex. Included in the purchase price is a customer list valued at $168,000. The estimated useful life of the asset is 5 years.

⁽²⁾  During 2013 and 2012, the Company’s MTE division capitalized legal fees related to a new patent application. The estimated useful life of the asset is 20 years.

In accordance with ASC 350 “Intangibles – Goodwill and Other,” goodwill and other indefinite-lived intangible assets are not amortized, but are tested for impairment. Such impairment testing is undertaken annually, or more frequently upon the occurrence of some indication that an impairment has taken place. The Company conducted an annual impairment test as of December 31, 2012.

A two-step process is utilized to determine if goodwill has been impaired. In the first step, the fair value of each reporting unit is compared to the net asset value recorded for such unit. If the fair value exceeds the net asset value, the goodwill of the reporting unit is not adjusted. However, if the recorded net asset value exceeds the fair value, the Company performs a second step to measure the amount of impairment loss, if any. In the second step, the implied fair value of the reporting unit’s goodwill is compared with the goodwill recorded for such unit. If the recorded amount of goodwill exceeds the implied fair value, an impairment loss is recognized in the amount of the excess.

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For the testing conducted as of December 31, 2012, the Company concluded that no impairment charge was warranted. Going forward there can be no assurance that economic conditions or other events may not have a negative material impact on the long-term business prospects of any of the Company’s reporting units. In such case, the Company may need to record an impairment loss, as stated above. The next annual impairment test will be conducted as of December 31, 2013, unless management identifies a triggering event in the interim.

Management has not identified any triggering events, as defined by ASC 350, during 2013. Accordingly, no interim impairment test has been performed.

Estimated future amortization expense for intangible assets subject to amortization in each of the next five fiscal years is as follows:

	Amortization Expense (in  thousands)
2013	$	440
2014	$	401
2015	$	58
2016	$	39
2017	$	14

Total amortization expense, excluding the amortization of deferred financing costs, consists of amortization expense related to intangible assets and software. Amortization expense related to intangible assets for the three months ended June 30, 2013 and June 30, 2012 was $113,000 and $206,000 respectively. Amortization expense related to intangible assets for the six months ended June 30, 2013 and June 30, 2012 was $224,000 and $401,000, respectively. Amortization expense related to software for the three months ended June 30, 2013 and June 30, 2012 was $37,000 and $41,000, respectively. Amortization expense related to software for the six months ended June 30, 2013 and June 30, 2012 was $73,000 and $79,000, respectively.

Changes in goodwill balances by segment (defined below) are as follows:

	Balance December 31, 2012		Translation Adjustment			Balance June 30, 2013
	(in thousands)
SL Power Electronics Corp.	$	4,242	$	(9	)	$	4,233
High Power Group:
MTE Corporation		8,189		—			8,189
Teal Electronics Corp.		5,055		—			5,055
RFL Electronics Inc.		5,249		—			5,249
Goodwill	$	22,735	$	(9	)	$	22,726

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9. Debt

Debt as of June 30, 2013 consisted of the following:

	June 30, 2013
	(in thousands)
2012 Credit Facility:
$40 million variable interest rate revolving credit facility maturing in 2016	$	2,490
Total debt		2,490
Less: current portion		(2,490	)
Total long-term debt	$	—

The Company had no debt outstanding as of December 31, 2012.

On August 9, 2012, the Company entered into a Credit Agreement with PNC Bank, National Association, as administrative agent and lender (“PNC Bank”), and the lenders from time to time party thereto, as amended (the “2012 Credit Facility”), to replace its Amended and Restated Revolving Credit Agreement with Bank of America, N.A, as amended (the “2008 Credit Facility”). The 2012 Credit Facility provides for borrowings up to $40,000,000 and under certain conditions maximum borrowings up to $70,000,000. The 2012 Credit Facility included a $5,000,000 sublimit for letters of credit (subsequently amended on March 11, 2013, as described below) and provides for a separate $10,700,000 letter of credit which expires one year from the date of closing, with annual extensions. The 2012 Credit Facility expires on August 9, 2016.

Borrowings under the 2012 Credit Facility bear interest, at the Company’s option, at the London interbank offering rate (“LIBOR”) plus a margin rate ranging from 1.25% to 2.0%, or the higher of a Base Rate plus a margin rate ranging from 0.25% to 1.0%. The Base Rate is equal to the highest of (i) the Federal Funds Open Rate plus 0.5% and (ii) the Prime Rate and (iii) the Daily Libor Rate plus 1%. The margin rates are based on certain leverage ratios, as defined. The Company is subject to compliance with certain financial covenants set forth in the 2012 Credit Facility, including, but not limited to, indebtedness to EBITDA, as defined, minimum levels of fixed charges and limitations on capital expenditures, as defined. Availability under the 2012 Credit Facility is based upon the Company’s trailing twelve month EBITDA, as defined.

The Company’s obligations under the 2012 Credit Facility are secured by the grant of security interests in substantially all of its assets.

On March 11, 2013, the Company entered into a First Amendment (the “First Amendment”) to the 2012 Credit Facility. The First Amendment, among other things, (a) amends the Letter of Credit (“LC”) sublimit amount to the lesser of (i) an amount equal to $5,000,000 plus the aggregate amount of Designated Usage LC issued and outstanding under the Designated Usage LC sublimit or (ii) $25,000,000 and (b) allows the Company to enter into foreign currency exchange services with Loan Parties on an unsecured basis and that such obligations shall not exceed at any time an aggregate amount equal to $3,500,000. In consideration for this amendment, the Company incurred $14,000 in fees and expenses, which are amortized over the remaining life of the 2012 Credit Facility.

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On May 28, 2013 a letter of credit in the amount of $8,564,000 was issued in favor of the Environmental Protection Agency (“EPA”) to provide financial assurance related to the Company’s environmental payments in accordance with the terms of the Consent Decree reached with the United States Department of Justice (“DOJ”) and EPA related to its liability for both OU-1 and OU-2 (see note 12 for additional information). The letter of credit expires on May 28, 2014 and requires an annual commitment fee of 0.125% and standby commission of 1%, and does not reduce amounts available under the 2012 Credit Facility.

On June 20, 2013, the Company entered into a Second Amendment and Joinder to Credit Agreement and to Security Agreement (the “Second Amendment”), which amends the 2012 Credit Facility in order to reflect the Reincorporation of the Company. The Second Amendment, among other things, joins the Company as a “Borrower” under the Credit Agreement and a “Debtor” under the Security Agreement entered into by SL-NJ in connection with the 2012 Credit Facility. In consideration for the Second Amendment, the Company incurred $16,000 in fees and expenses, which are amortized over the remaining life of the 2012 Credit Facility.

As of June 30, 2013, the Company had an outstanding balance of $2,490,000 under the 2012 Credit Facility. As of December 31, 2012 the Company had no outstanding balance under the 2012 Credit Facility. At June 30, 2013 and December 31, 2012, the Company had total availability under the 2012 Credit Facility of $37,026,000 and $39,510,000, respectively.

10. Accrued Liabilities – Other

Accrued liabilities – other consist of the following:

	June 30,		December 31,
	2013		2012
	(in thousands)
Taxes (other than income) and insurance	$	500	$	602
Commissions		637		680
Litigation and legal fees		119		138
Other professional fees		374		418
Environmental		5,051		5,334
Warranty		1,380		1,102
Deferred revenue		76		56
Acquisition earn-out, current		121		164
Other		2,413		2,092
Accrued liabilities - other	$	10,671	$	10,586

Included in the environmental accrual are estimates for all known costs believed to be probable and reasonably estimable for sites that the Company currently operates or operated at one time (see Note 12 for additional information).

A liability is established for estimated future warranty and service claims that relate to current and prior period sales. The Company estimates warranty costs based on historical claim experience and other factors including evaluating specific product warranty issues.

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The following is a summary of activity in accrued warranty and service liabilities:

	Six Months Ended
	June 30, 2013
	(in thousands)
Liability, beginning of year	$	1,102
Expense for new warranties issued		683
Warranty claims		(405	)
Liability, end of period	$	1,380

11. Other Long – Term Liabilities

Other long-term liabilities consist of the following:

	June 30,		December 31,
	2013		2012
	(in thousands)
Environmental	$	17,200	$	19,033
Unrecognized tax benefits, interest and penalties		792		657
Long-term incentive plan		255		220
Acquisition earn-out, long-term		37		57
Other long-term liabilities	$	18,284	$	19,967

12. Commitments and Contingencies

The Company is involved in certain legal and regulatory actions. Management believes that the ultimate resolution of such matters is unlikely to have a material adverse effect on the Company’s financial condition or results of operations, except as described below.

Litigation: The Company has been and is the subject of administrative actions that arise from its ownership of SL Surface Technologies, Inc. (“SurfTech”), a wholly-owned subsidiary, the assets of which were sold in November 2003. SurfTech formerly operated chrome-plating facilities in Pennsauken Township, New Jersey (the “Pennsauken Site”) and Camden, New Jersey (the “Camden Site”).

In 2006 the United States Environmental Protection Agency (the “EPA”) named the Company as a potential responsible party (a “PRP”) in connection with the remediation of the Puchack Well Field, which has been designated as a Superfund Site. The EPA has alleged that hazardous substances generated at the Company’s Pennsauken Site contaminated the Puchack Well Field. As a PRP, the Company is potentially liable, jointly and severally, for the investigation and remediation of the Puchack Well Field Superfund Site under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”).

The EPA is remediating the Puchack Well Field Superfund Site in two separate operable units. The first operable unit (“OU-1”) consists of an area of chromium groundwater contamination in three aquifers that exceeds the selected cleanup standard. The second operable unit (“OU-2”) pertains to sites that are allegedly the sources of contamination for the first operable unit. The EPA advised the Company in October 2010 that OU-2 includes soil contamination in the immediate vicinity of the Company’s Pennsauken Site.

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In June 2011, the EPA announced a proposed plan for “cleaning up the soil” at OU-2. The remedy proposed by the EPA is “Geochemical Fixation.” This remedy involves applying a chemical reductant to the contaminated soil to reduce hexavalent chromium by converting it to immobilized trivalent chromium. The EPA’s estimated cost for this remedy is $20,700,000 over seven years. On September 26, 2011 the EPA issued a Record of Decision (“ROD”) selecting the Geochemical Fixation remedy.

The Company has reached an agreement with both the DOJ and EPA related to its liability for both OU-1 and OU-2 and has entered into a Consent Decree which governs the agreement, the terms of which are described below. The Company has agreed to perform the remediation for OU-2. Also, the Company has agreed to pay a fixed sum for the EPA’s past cost for OU-2 and a portion of the EPA’s past cost for OU-1. The payments are to be made in five equal payments of $2,141,000, for a total $10,705,000, plus interest. The Company has also agreed to pay the EPA’s costs for oversight of the OU-2 remediation. The United States District Court judge signed the Consent Decree effective April 30, 2013, thereby triggering the Company’s obligation under the Consent Decree. On May 10, 2013 the Company made the first payment related to its obligation under the Consent Decree in the amount of $2,185,000, which included interest. The next four payments will be made on the anniversary of the first payment plus ten days in the same amount of $2,141,000, plus interest. On May 28, 2013, a letter of credit in the amount of $8,564,000 was issued in favor of the EPA to provide financial assurance related to the Company’s remaining obligation to pay for the EPA’s past cost as mentioned above. Also, on July 19, 2013 the Company obtained financial assurance as required by the terms of the Consent Decree.

On December 3, 2012, the Company received a demand letter from the State of New Jersey. The demand is for $1,300,000 for past and future cleanup costs and $500,000 for natural resource damages (“NRD”) for a total of $1,800,000 (the “New Jersey Claim”). Although the Company and its counsel believe that it has meritorious defenses to any claim for reimbursement, the Company has offered to pay $250,000 to fully resolve the claim presented by the State of New Jersey for past costs, future costs and NRD at the Puchack Well Field Superfund site. The State of New Jersey is evaluating the Company’s counter-offer. Based on the current available information, the Company has estimated a total combined potential liability for OU-1 and OU-2 and the New Jersey Claim to be in the range of $18,169,000 to $29,550,000 The Company has recorded an accrual of $18,169,000 related to its combined liability related to this site. The estimated OU-2 remediation liability is based upon the EPA’s plan for remediation as provided in the ROD for OU-2 and the evaluation of data by the Company’s environmental engineering consultants. The liability for OU-1 and OU-2 is based upon the current terms of the Consent Decree.

Other

During 2012, the Company conducted an investigation to determine whether certain employees of SL Xianghe Power Electronics Corporation, SL Shanghai Power Electronics Corporation and SL Shanghai International Trading Corporation, three of the Company’s indirect wholly-owned subsidiaries incorporated and operating exclusively in China, may have improperly provided gifts and entertainment to government officials (the “China Investigation”). Based upon the China Investigation, which we believe is substantially complete, the estimated amounts of such gifts and entertainment was not material to the Company’s financial statements. Such estimate does not take into account the costs to the Company of the China Investigation itself, or any other additional costs.

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The China Investigation included determining whether there were any violations of laws, including the U.S. Foreign Corrupt Practices Act (“FCPA”). The Company’s outside counsel has contacted the DOJ and the Securities and Exchange Commission (the “SEC”) voluntarily to disclose that the Company was conducting an internal investigation, and agreed to cooperate fully and update the DOJ and SEC periodically on further developments. The Company’s counsel has done so, and the Company has continued to cooperate fully with the DOJ and the SEC on the results of the China Investigation and various remediation actions undertaken by the Company.

The Company had retained outside counsel and forensic accountants to assist in the China Investigation. Additionally, the Company hired outside consultants to provide assistance in implementing a mandatory FCPA compliance program for all of its employees which was completed in December 2012. Also, during the first and second quarters of 2013 the Company engaged outside consultants to perform FCPA compliance tests at its operations in China and Mexico. The Company cannot predict at this time whether any regulatory action may be taken or any other adverse consequences may result from this matter.

In the ordinary course of its business the Company is and may be subject to other loss contingencies pursuant to foreign and domestic federal, state and local governmental laws and regulations and may be party to certain legal actions, frequently involving complaints by terminated employees and disputes with customers, suppliers and others. In the opinion of management, any such other loss contingencies are not expected to have a material adverse effect on the financial condition or results of operations of the Company.

Environmental Matters: Loss contingencies include potential obligations to investigate and eliminate or mitigate the effects on the environment of the disposal or release of certain chemical substances at various sites, such as Superfund sites and other facilities, whether or not they are currently in operation. The Company is currently participating in environmental assessments and cleanups at a number of sites and in the future may be involved in additional environmental assessments and cleanups. Based upon investigations completed to date by the Company and its independent engineering-consulting firms, management has provided an estimated accrual for all known costs believed to be probable and costs that can be reasonably estimated in the amount of $22,251,000, of which $17,200,000 is included as other long-term liabilities, with the remainder recorded as other short-term accrued liabilities, as of June 30, 2013. However, it is the nature of environmental contingencies that other circumstances might arise, the costs of which are indeterminable at this time due to such factors as changing government regulations and stricter standards, the unknown magnitude of cleanup costs, the unknown timing and extent of the remedial actions that may be required, the determination of the Company’s liability in proportion to other responsible parties, the divisibility of costs. These other circumstances could result in additional expenses or judgments, or offsets thereto. The adverse resolution of any one or more of these other circumstances could have a material adverse effect on the business, operating results, financial condition or cash flows of the Company. The Company’s environmental costs primarily relate to discontinued operations and such costs have been recorded in discontinued operations, net of tax.

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There are three sites on which the Company may incur material environmental costs in the future as a result of past activities of its former subsidiary, SurfTech. There are two Company owned sites related to its former subsidiary, SurfTech. These sites are located in Pennsauken, New Jersey (the “Pennsauken Site”) and in Camden, New Jersey (the “Camden Site”). There is also a third site, which is not owned by the Company, referred to as the “Puchack Well Field Site.” The Puchack Well Field Site and the Pennsauken Site are part of the Puchack Well Field Superfund Site.

With respect to the Camden Site, the Company has reported soil contamination and a groundwater contamination plume emanating from the site. The New Jersey Department of Environmental Protection (“NJDEP”) approved, and the Company implemented in 2010, an interim remedial action pilot study to inject neutralizing chemicals into the unsaturated soil. Based on an assessment of post-injection data, our consultants believe the pilot study can be implemented as a full scale soil remedy to treat unsaturated contaminated soil. A Remedial Action Workplan for soils (“RAWP”) is being developed. The RAWP will select the injection remedy as the site wide remedy for unsaturated soils, along with demolition and proper disposal of the former concrete building slab and targeted excavation and disposal of impacted soil immediately underlying the slab. Additionally, the RAWP will address a small area of impacted soil off the property. The RAWP will be submitted to the NJDEP, by the Licensed Site Remediation Professional (“LSRP”) for the site. The RAWP is scheduled to be implemented in 2014. Also, the Company’s environmental consultants finalized an interim remedial action pilot study to treat on-site contaminated groundwater, consisting of injecting food-grade product, into the groundwater at the down gradient property boundary, to create a “bio-barrier.” The pilot study includes post-injection monitoring to assess the bio-barrier’s ability to treat contaminated groundwater. Implementation of the groundwater pilot study is currently underway with post-injection effectiveness monitoring expected to occur in 2014.

As previously reported, the Company is currently participating in environmental assessments and cleanups at a number of sites. One of these sites is a commercial facility, located in Wayne, New Jersey. Contaminated soil and groundwater has undergone remediation with NJDEP oversight, but contaminants of concern (“COCs”) in groundwater and surface water, which extend off-site, still remain above applicable NJDEP remediation standards. Certain COCs have also been detected in the indoor air of two commercial buildings, located on the property. One of the buildings (the “Main Building”) was outfitted with a sub-slab depressurization system as a mitigation measure. The source investigations under the Main Building were completed in June 2012. Soil and groundwater samples collected from underneath the Main Building identified COCs in excess of the NJDEP’s applicable remediation standards. Consequently, a soil contaminant source remains under the Main Building that is feeding the groundwater contamination. The remedial investigation conducted in the second quarter of 2012 identified a new soil source of COCs. A soil remedial action plan will be required in order to remove the new soil source contamination by a second building that continues to impact groundwater. Our consultants have reviewed data to determine what supplemental remedial action is necessary for soils, and whether to modify or expand the groundwater remedy that will likely consist of additional in-situ injections of food grade product into the groundwater. Estimates have been developed by the Company’s consultants, which includes costs to enhance the existing vapor intrusion system, remedial injections, soil excavation and additional tests and remedial activities. Costs related to this site are recorded as part of discontinued operations, net of tax.

21

The Company has reported soil and groundwater contamination at the facility of SL-MTI located on its property in Montevideo, Minnesota. An analysis of the contamination has been completed and a remediation plan has been implemented at the site pursuant to the remedial action plan approved by the Minnesota Pollution Control Agency. The remaining steps under this plan are the monitoring of samples. Costs related to this site are recorded as a component of continuing operations.

As of June 30, 2013 and December 31, 2012, environmental accruals of $22,251,000 and $24,367,000, respectively, have been recorded by the Company in accrued liabilities – other and in other long-term liabilities, as appropriate (see Notes 10 and 11 for additional information).

13. Segment Information

The Company currently operates under four business segments: SL Power Electronics Corp. (“SLPE”), the High Power Group, SL-MTI and RFL Electronics Inc. (“RFL”). Teal Electronics Corp. (“TEAL”) and MTE Corporation (“MTE”) are combined into one business segment, which is reported as the High Power Group. The Company aggregates operating business subsidiaries into a single segment for financial reporting purposes if aggregation is consistent with the objectives of ASC 280 “Segment Reporting.” Business units are also combined if they have similar characteristics in each of the following areas:

• nature of products and services

• nature of production process

• type or class of customer

• methods of distribution

SLPE designs, manufactures and markets high-reliability power conversion products in internal and external footprints. The Company’s power supplies provide a reliable and safe power source for the customer’s specific equipment needs. SLPE, which sells products under three brand names (SL Power Electronics, Condor and Ault), is a major supplier to the original equipment manufacturers (“OEMs”) of medical, industrial/instrumentation, military and information technology equipment. The High Power Group sells products under two brand names (TEAL and MTE). TEAL designs and manufactures custom power conditioning and distribution units for OEMs of medical imaging, medical treatment, military aerospace, semiconductor, solar and advanced simulation systems. MTE designs and manufactures power quality products used to protect equipment from power surges, bring harmonics into compliance and improve the efficiency of variable speed motor drive systems. SL-MTI designs and manufactures high power density precision motors that are used in numerous applications, including military and commercial aerospace, oil and gas, and medical and industrial products. RFL designs and manufactures communication and power protection products/systems that are used to protect electric utility transmission lines and apparatus by isolating faulty transmission lines from a transmission grid. The Unallocated Corporate Expenses segment includes corporate related items, financing activities and other costs not allocated to reportable segments, which includes but is not limited to certain treasury, risk management, legal, litigation and public reporting charges and certain legacy costs. The accounting policies for the business units are the same as those described in the summary of significant accounting policies. For additional information, see Note 1 of the Notes to the Consolidated Financial Statements included in Part IV of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

22

Business segment operations are conducted through domestic subsidiaries. For all periods presented, sales between business segments were not material. Each of the segments has certain major customers, the loss of any of which would have a material adverse effect on such segment.

The unaudited comparative results for the three and six month periods ended June 30, 2013 and June 30, 2012 are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Net sales
SLPE	$	18,386	$	18,824	$	35,980	$	37,167
High Power Group		17,607		15,896		34,700		31,471
SL-MTI		9,060		9,077		18,154		18,676
RFL		4,733		5,102		10,047		10,925
Net sales	$	49,786	$	48,899	$	98,881	$	98,239

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
	(in thousands)
Income from operations
SLPE	$	1,131		$	479		$	2,181		$	268
High Power Group		2,038			1,585			4,152			2,950
SL-MTI		1,569			1,441			2,882			3,144
RFL		393			578			1,329			1,636
Unallocated Corporate Expenses		(1,500	)		(1,738	)		(2,927	)		(3,281	)
Income from operations	$	3,631		$	2,345		$	7,617		$	4,717

Total assets as of June 30, 2013 and December 31, 2012 are as follows:

	June 30,		December 31,
	2013		2012
	(in thousands)
Total assets
SLPE	$	38,592	$	36,419
High Power Group		33,459		31,296
SL-MTI		13,445		12,012
RFL		13,104		13,744
Unallocated Corporate Assets		12,348		13,666
Total assets	$	110,948	$	107,137

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Goodwill and other intangible assets, net, as of June 30, 2013 and December 31, 2012 are as follows:

	June 30, 2013		December 31, 2012
	(in thousands)
Goodwill and other intangible assets, net
SLPE	$	4,541	$	4,563
High Power Group		15,180		15,343
SL-MTI		123		140
RFL		5,332		5,359
Goodwill and other intangible assets, net	$	25,176	$	25,405

14. Retirement Plans And Deferred Compensation

During the six months ended June 30, 2013 and June 30, 2012, the Company maintained a defined contribution pension plan covering all full-time, U.S. employees of SLPE, the High Power Group, including TEAL and MTE, SL-MTI, RFL, and the corporate office. The Company’s contributions to this plan are based on a percentage of employee contributions and/or plan year gross wages, as defined. Costs incurred under these plans amounted to $181,000 and $397,000 during the three month and six month periods ended June 30, 2013 compared to $232,000 and $433,000 during the three month and six month periods ended June 30, 2012.

The Company has agreements with certain retired directors, officers and key employees providing for supplemental retirement benefits. The liability for supplemental retirement benefits is based on the most recent mortality tables available and discount rates ranging from 6% to 12%. The amount charged to expense in connection with these agreements amounted to $90,000 and $132,000 for the three month and six month periods ended June 30, 2013 compared to $101,000 and $201,000 for the three month and six month periods ended June 30, 2012.

15. Discontinued Operations

For the three and six months ended June 30, 2013, total loss from discontinued operations before income taxes was $390,000 and $748,000 ($237,000 and $455,000, net of tax). For the three and six months ended June 30, 2012, total loss from discontinued operations before income taxes was $401,000 and $714,000 ($244,000 and $438,000, net of tax), respectively. The loss from discontinued operations during 2013 and 2012 relates to environmental remediation costs, consulting fees, and legal expenses associated with the past operations of the Company’s five environmental sites (See Note 12 – Commitments and Contingencies for further information concerning the environmental sites).

16. Fair Value Measurement and Financial Instruments

ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. FASB ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.

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ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, FASB ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Currently, the Company uses foreign currency forward contracts to hedge its foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including spot rates and market forward points. The fair value of the foreign currency forward contracts is based on interest differentials between the currencies being traded, spot rates and market forward points.

To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees, where applicable.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of June 30, 2013, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

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In conjunction with its implementation of updates to the fair value measurements guidance, the Company made an accounting policy election to measure derivative financial instruments subject to master netting agreements on a net basis.

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2013 and December 31, 2012, aggregated by the level in the fair value hierarchy within which those measurements fall:

	Quoted Prices in  Active Markets for Identical Assets and Liabilities (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs  (Level 3)		Balance at June 30,     2013
	(in thousands)
Liabilities
Derivative financial instruments	$	—	$	84	$	—	$	84

	Quoted Prices in  Active Markets for Identical Assets and Liabilities (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs  (Level 3)		Balance at December  31, 2012
	(in thousands)
Assets
Derivative financial instruments	$	—	$	243	$	—	$	243

The Company does not have any fair value measurements using significant unobservable inputs (Level 3) as of June 30, 2013 and December 31, 2012.

Credit Risk Contingent Features

The Company has agreements with its derivative counterparties that contain a provision where if the Company defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

17. Derivative Instruments and Hedging Activities

ASC Topic 815, as amended and interpreted, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. As required by ASC Topic 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to variability in expected future cash flows related to forecasted foreign exchange-based risk are considered economic hedges of the Company’s forecasted cash flows.

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Risk Management Objective of Using Derivatives

The Company is a U.S. dollars (USD) functional currency entity that manufactures products in the USA, Mexico and China. The Company’s sales are priced in USD and its costs and expenses are priced in USD, Mexican pesos (MXN) and Chinese Yuan (CNH). As a result, the Company has exposure to changes in exchange rates between the time when expenses in the non-functional currencies are initially incurred and the time when the expenses are ultimately paid. The Company’s objective in using derivatives is to add stability and to manage its exposure to foreign exchange risks. To accomplish this objective, the Company uses foreign currency forward contracts to manage its exposure to fluctuations in the exchange rates. Foreign currency forward contracts involve fixing the USD-MXN and USD-CNH exchange rates for delivery of a specified amount of foreign currency on a specified date.

During 2012 and 2013, the Company entered into a series of foreign currency forward contracts to hedge its exposure to foreign exchange rate movements in its forecasted expenses in China and Mexico. The foreign currency forwards are not speculative and are being used to manage the Company’s exposure to foreign exchange rate movements. Foreign currency forward contracts involve fixing the USD-MXN and USD-CNH exchange rates for delivery of a specified amount of foreign currency on a specified date. The Company has elected not to apply hedge accounting to these derivatives and they are marked to market through earnings. Therefore, gains and losses resulting from changes in the fair value of these contracts are recognized at the end of each reporting period directly in earnings. The gains and losses associated with the foreign currency forward contracts are included in other gain (loss), net on the Consolidated Statements of Income. As of June 30, 2013, the fair value of the foreign currency forward contracts was recorded as an $84,000 liability in other current liabilities on the Consolidated Balance Sheets. As of December 31, 2012, the fair value of the foreign currency forward contracts was recorded as a $243,000 asset in other current assets on the Consolidated Balance Sheets.

Non-designated Hedges of Foreign Exchange Risk

The notional amounts are used to measure the volume of foreign currency forward contracts and do not represent exposure to foreign currency losses. The following table summarizes the notional values of the Company’s derivative financial instruments as of June 30, 2013.

Product	Number of Instruments		Notional
			(in thousands)
Mexican Peso (MXN) Forward Contracts		18	MXN	70,147
Chinese Yuan (CNH) Forward Contracts		9	CNH	49,750

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The following table details the location in the financial statements of the gain or loss recognized on foreign currency forward contracts that are marked to market for the three and six months ended June 30, 2013 and June 30, 2012:

		Three Months Ended June 30, 2013				Three Months Ended June 30, 2012
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in  Income on Derivative	Amount of Gain (Loss)  Recognized in Income on Derivative			Location of Gain (Loss) Recognized in  Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative
		(in thousands)				(in thousands)
Foreign Exchange Contracts	Other gain (loss), net	$	(301	)	Other gain (loss), net	$	(162	)

		Six Months Ended June 30, 2013				Six Months Ended June 30, 2013
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in  Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative			Location of Gain (Loss) Recognized in  Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative
		(in thousands)				(in thousands)
Foreign Exchange Contracts	Other gain (loss), net	$	(327	)	Other gain (loss), net	$	(170	)

18. Foreign Operations

As a result of a work stoppage at the Company’s Xianghe manufacturing facilities from March 7, 2013 through March 20, 2013, revenues for the quarter ended March 31, 2013 were adversely impacted by approximately $900,000. The Company realized those sales during the second quarter of 2013. Additionally, certain incremental costs were incurred during the six months ended June 30, 2013 related to the work stoppage, including employee, travel, consulting and legal costs of $535,000.

19. Shareholders’ Equity

On November 16, 2010, the Board of Directors authorized a plan that allows for the repurchase up to an aggregate of 470,000 shares of the Company’s outstanding common stock (the “2010 Repurchase Plan”). Any repurchases pursuant to the 2010 Repurchase Plan would be made in the open market or in negotiated transactions. During the first six months of 2013, the Company purchased approximately 33,000 shares of Company stock at an average price of $23.79 a share. As a result, as of June 30, 2013, approximately 297,000 shares remained available for purchase under the 2010 Repurchase Plan.

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20. Related Party Transactions

On May 1, 2013, the Company entered into a Management Services Agreement (“Management Services Agreement”) with SP Corporate Services LLC (“SP Corporate”). SP Corporate is an affiliate of SPH Group Holdings LLC (“SPHG”). A member of the Company’s Board of Directors, Warren G. Lichtenstein, is affiliated with SPHG. Also, the Company’s Chairman of the Board, Glen M. Kassan is affiliated with SPHG. Pursuant to the Management Services Agreement, SP Corporate agreed to provide, at the direction of the Company’s Chief Executive Officer, non-exclusive services to support the Company’s growth strategy, business development, planning, execution assistance and related support services. The monthly fee for these services is $10,400 paid in advance. The Management Services Agreement has a term of one year and has been approved by the Audit Committee of the Board of Directors and a majority of the disinterested directors of the Company.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following section highlights significant factors impacting the consolidated operations and financial condition of the Company and its subsidiaries. The following discussion should be read in conjunction with the Consolidated Financial Statements included in Part I of this Quarterly Report on Form 10-Q.

Forward-Looking Statements

In addition to other information in this Quarterly Report on Form 10-Q, this Management’s Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and the current economic environment. These statements are not guarantees of future performance. They involve a number of risks and uncertainties that are difficult to predict, including, but not limited to, the Company’s ability to implement its business plan, retain key management, anticipate industry and competitive conditions, realize operating efficiencies, secure necessary capital facilities and obtain favorable determinations in various legal and regulatory matters. Actual results could differ materially from those expressed or implied in the forward-looking statements. Some important assumptions and other critical factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, and Current Reports on Form 8-K.

Overview

SL Industries, Inc., through its subsidiaries, designs, manufactures and markets power electronics, motion control, power protection, power quality, and specialized communication equipment that is used in a variety of medical, commercial and military aerospace, solar, computer, datacom, industrial, telecom, transportation, utility, rail and highway equipment applications. Its products are generally incorporated into larger systems to improve operating performance, safety, reliability and efficiency. The Company’s products are largely sold to Original Equipment Manufacturers (“OEMs”), the utility industry and, to a lesser extent, to commercial distributors. The Company is comprised of four domestic business segments, three of which have significant manufacturing operations in Mexico. SL Power Electronics Corp. (“SLPE”) has manufacturing, engineering and sales capability in China. Most of the Company’s sales are made to customers who are based in the United States. The Company places an emphasis on highly engineered, well-built, high quality, dependable products and is dedicated to continued product enhancement and innovation.

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The Company’s business strategy has been to enhance the growth and profitability of each of its businesses through the penetration of attractive new market niches, further improvement of operations through the implementation of lean manufacturing principles, expansion of lean principles into the transactional side of the business, and expansion of global capabilities. The Company intends to focus on improving efficiencies that better leverage the Company’s resources. Lean initiatives, both on the factory floor and throughout the organization, are ongoing. The Company expects to pursue its goals during the next twelve months principally through organic growth. The Company also continues to pursue strategic alternatives to maximize shareholder value. Some of these alternatives have included, and could continue to include, selective acquisitions, divestitures and the sale of certain assets. The Company has provided, and may from time to time in the future provide, information to interested parties.

In the sections that follow, statements with respect to the quarter ended 2013 or six months ended 2013 refer to the three month and six month periods ended June 30, 2013. Statements with respect to the quarter ended 2012 or six months ended 2012 refer to the three month and six month periods ended June 30, 2012. Also, statements with respect to operating costs refer to engineering and product development costs, selling, general and administrative costs and depreciation and amortization (“operating costs”).

Significant Transactions and Financial Trends

As a result of a work stoppage at the Company’s Xianghe manufacturing facilities from March 7, 2013 through March 20, 2013, revenues for the quarter ended March 31, 2013 were adversely impacted by approximately $900,000. The Company realized those sales during the second quarter of 2013. Additionally, certain incremental costs were incurred during the six months ended June 30, 2013 related to the work stoppage, including employee, travel, consulting and legal costs of $535,000.

On March 11, 2013, the Company entered into a First Amendment (the “First Amendment”) to the senior revolving credit facility (the “2012 Credit Facility”) with PNC Bank, National Association (“PNC Bank”). The First Amendment, among other things, (a) amends the Letter of Credit (“LC”) sublimit amount to the lesser of (i) an amount equal to $5,000,000 plus the aggregate amount of Designated Usage LC issued and outstanding under the Designated Usage LC sublimit or (ii) $25,000,000 and (b) allows the Company to enter into foreign currency exchange services with Loan Parties on an unsecured basis and that such obligations shall not exceed at any time an aggregate amount equal to $3,500,000 (See Note 9 – Debt for terms and conditions of the 2012 Credit Facility).

On May 9, 2013, the Company’s shareholders voted to approve a proposal to change the state of incorporation of SL Industries from the State of New Jersey to the State of Delaware by merging SL Industries, Inc., a New Jersey corporation (“SL-NJ”) with and into SL Industries, Inc., a Delaware corporation (“SL-DE”) (the “Reincorporation”). On June 20, 2013 (the “Effective Date”), the Reincorporation was effected by merging SL-NJ with and into SL-DE pursuant to an Agreement and Plan of Merger, dated June 3, 2012, between SL-NJ and SL-DE. SL-DE survived the merger and SL-NJ ceased to exist. The principal reason for the Reincorporation was to give the Company a greater measure of flexibility and simplicity in corporate governance and provide greater clarity and predictability with respect to the Company’s corporate legal affairs. The Reincorporation did not result in any change in the name, business, management, fiscal year, accounting, location of the principal executive officers, assets or liabilities or net worth (other than the costs of reincorporation which were immaterial) of the Company.

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On June 20, 2013, the Company entered into a Second Amendment and Joinder to Credit Agreement and to Security Agreement (the “Second Amendment”), which amends the 2012 Credit Facility in order to reflect the Reincorporation of the Company. The Second Amendment, among other things, joins the Company as a “Borrower” under the Credit Agreement and a “Debtor” under the Security Agreement entered into by SL-NJ in connection with the 2012 Credit Facility.

Business Trends

Demand for the Company’s products and services were relatively flat during 2013 compared to 2012. Sales for the six months ended June 30, 2013, increased by $642,000, or 1%, and income from operations increased by $2,900,000, or 61%. MTE Corporation (“MTE”), which is part of the High Power Group, recorded an increase in sales during 2013, which was offset by decreases at the remaining operating units. SLPE and MTE recorded increases in income from operations during 2013 as compared to 2012, which was partially offset by decreases at Teal Electronics Corp. (“TEAL”), which is part of the High Power Group, Montevideo Technology, Inc. (“SL-MTI”), and RFL Electronics Inc. (“RFL”). Also, Unallocated Corporate Expenses decreased by $354,000, or 11%, primarily due to lower stock compensation expense, consulting, and legal expenses.

During the six months ended June 30, 2013, the Company’s backlog increased to $72,125,000, from $66,210,000 for the same period in the prior year, for a change of 9% on a comparative basis. The increase in backlog in 2013 was primarily attributable to the High Power Group, SLPE, and SL-MTI, who recorded a 14%, 13%, and 3% increase in backlog, respectively. Backlog at RFL was relatively the same in 2013 and 2012. The Company’s net new orders for the six months ended June 30, 2013 increased by 7%, compared to the six months ended June 30, 2012.

The Company’s management is taking numerous actions to improve sales through the deployment of numerous growth tools aimed at identifying attractive market segments and penetrating those markets through aggressive new product introduction. The Company is also identifying and penetrating selected geographic opportunities. The Company is continuing to emphasize lean initiatives at all of its facilities in manufacturing as well as in the transactional and reporting processes. The Company also continues to pursue strategic alternatives to maximize shareholder value. Some of these alternatives have included, and could continue to include, selective acquisitions, divestitures and the sale of certain assets.

While these items are important in understanding and evaluating financial results and trends, other transactions or events, which are disclosed in this Management’s Discussion and Analysis, may have a material impact on continuing operations. A complete understanding of these transactions is necessary in order to estimate the likelihood that these trends will continue.

Critical Accounting Policies

The Company’s consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). GAAP requires management to make estimates and assumptions that affect the amounts of reported and contingent assets and liabilities at the date of the consolidated financial statements and the amounts of reported net sales and expenses during the reporting period.

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The SEC has issued disclosure guidance for “critical accounting policies.” The SEC defines “critical accounting policies” as those that are most important to the portrayal of the Company’s financial condition and results, and that require application of management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

The Company’s significant accounting policies are described in Note 1 in the Notes to Consolidated Financial Statements included in Part IV of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. Not all of these significant accounting policies require management to make difficult, subjective or complex judgments or estimates. However, the following policies are deemed to be critical within the SEC definition. The Company’s senior management has reviewed these critical accounting policies and estimates and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations with the Audit Committee of the Board of Directors.

Revenue Recognition

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. Revenue is recorded in accordance with Staff Accounting Bulletin (“SAB”) No. 104 and in certain circumstances in accordance with the guidance provided by ASC 605-25 “Revenue Recognition – Multiple-Element Arrangements.” The major portion of the Company’s revenue is derived from equipment sales. The Company recognizes equipment revenue upon shipment or delivery, depending upon the terms of the order, and transfer of title. Generally, the revenue recognition criteria is met at the time the product is shipped. Provisions are established for product warranties, principally based on historical experience. At times the Company establishes reserves for specific warranty issues known by management. Customer service and installation revenue is recognized when completed. RFL has customer service revenue, which accounted for less than one percent of consolidated net revenue for the six months ended 2013 and 2012.

SLPE has two sales programs with distributors, pursuant to which credits are issued to distributors: (1) a re-stocking program and (2) a competitive discount program. The distributor re-stocking program allows distributors to rotate up to a pre-determined percentage of their purchases over the previous six month period. SLPE provides for this allowance as a decrease to revenue based upon the amount of sales to each distributor and other historical factors. The competitive discount program allows a distributor to sell a product out of its inventory at a negotiated price in order to meet certain competitive situations. SLPE records this discount as a reduction to revenue based on the distributor’s eligible inventory. The eligible distributor inventory is reviewed at least quarterly. No cash is paid under either distributor program. These programs affected consolidated gross revenue for each of the six month periods ended 2013 and 2012 by approximately 0.5% and 0.6%, respectively.

Certain judgments affect the application of the Company’s revenue policy, as mentioned above. Revenue recognition is significant because net revenue is a key component of results of operations. In addition, revenue recognition determines the timing of certain expenses, such as commissions, royalties and certain incentive programs. Revenue results are difficult to predict. Any shortfall in revenue or delay in recognizing revenue could cause operating results to vary significantly from year to year and quarter to quarter.

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Allowance For Doubtful Accounts

The Company’s estimate for the allowance for doubtful accounts related to trade receivables is based on two methods. The amounts calculated from each of these methods are combined to determine the total amount reserved. First, the Company evaluates specific accounts where it has information that the customer may have an inability to meet its financial obligations (e.g., bankruptcy or insolvency). In these cases, the Company uses its judgment, based on the best available facts and circumstances, and records a specific reserve for that customer against amounts due to reduce the receivable to the amount that is expected to be collected. These specific reserves are reevaluated and adjusted as additional information is received that impacts the amount reserved. Second, a general reserve is established for all customers based on several factors, including historical write-offs as a percentage of sales. If circumstances change (e.g., higher than expected defaults or an unexpected material adverse change in a major customer’s ability to meet its financial obligation), the Company’s estimates of the recoverability of amounts due could be reduced by a material amount. Receivables are charged off against the reserve when they are deemed uncollectible. The Company’s allowance for doubtful accounts equaled 2.1% and 2.0% of gross trade receivables as of June 30, 2013 and December 31, 2012.

Inventories

The Company values inventory at the lower of cost or market, and continually reviews the book value of discontinued product lines to determine if these items are properly valued. The Company identifies these items and assesses the ability to dispose of them at a price greater than cost. If it is determined that cost is less than market value, then cost is used for inventory valuation. If market value is less than cost, then related inventory is adjusted to market value.

If a write down to the current market value is necessary, the market value cannot be greater than the net realizable value, which is defined as selling price less costs to complete and dispose, and cannot be lower than the net realizable value less a normal profit margin. The Company also continually evaluates the composition of its inventory and identifies obsolete, slow-moving and excess inventories. Inventory items identified as obsolete, slow-moving or excess are evaluated to determine if reserves are required. If the Company were not able to achieve its expectations of the net realizable value of the inventory at current market value, it would have to adjust its reserves accordingly. The Company attempts to accurately estimate future product demand to properly adjust inventory levels. However, significant unanticipated changes in demand could have a significant impact on the value of inventory and of operating results.

Derivative Instruments and Hedging Activities

FASB ASC 815, “Derivatives and Hedging” (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

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The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. Certain of the Company’s foreign operations expose the Company to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the value of the Company’s revenues, expenses, cash receipts and payments in terms of the Company’s functional currency. The Company enters into derivative financial instruments to protect the value or fix the amount of certain cash flows in terms of the functional currency of the business unit with that exposure.

As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. Currently, the Company does not apply hedge accounting to any of its foreign currency derivatives.

Accounting For Income Taxes

Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against deferred tax assets. Net deferred tax assets as of June 30, 2013 and December 31, 2012 were $13,062,000 and $13,134,000, respectively, net of valuation allowances of $1,983,000 and $1,987,000 (mostly related to discontinued operations) as of June 30, 2013 and December 31, 2012, respectively. The carrying value of the Company’s net deferred tax assets assumes that the Company will be able to generate sufficient future taxable income in certain tax jurisdictions. Valuation allowances are attributable to uncertainties related to the Company’s ability to utilize certain deferred tax assets prior to expiration. These deferred tax assets primarily consist of certain federal and state tax expenses, research and development tax credits, and loss carryforwards. The valuation allowance is based on estimates of taxable income, expenses and credits by the jurisdictions in which the Company operates and the period over which deferred tax assets will be recoverable. In the event that actual results differ from these estimates or these estimates are adjusted in future periods, the Company may need to establish an additional valuation allowance that could materially impact its consolidated financial position and results of operations. Each quarter, management evaluates the ability to realize the deferred tax assets and assesses the need for additional valuation allowances.

The Company applies the provisions of ASC 740-10-55 to all tax positions for which the statute of limitations remain open. The amount of gross unrecognized tax benefits, excluding interest and penalties, as of June 30, 2013 and December 31, 2012 was $710,000 and $595,000, respectively. This amount represents unrecognized tax benefits, which, if ultimately recognized, will reduce the Company’s effective tax rate. As of June 30, 2013 and December 31, 2012, the Company reported accrued interest and penalties related to unrecognized tax benefits of $82,000 and $62,000, respectively. For additional disclosures related to accounting for income taxes, see Note 10 in the Notes to the Consolidated Financial Statements included in Part IV of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

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Legal Contingencies

The Company is currently involved in certain legal proceedings. As discussed in Note 12 of the Notes to the Consolidated Financial Statements included in Part I of this Quarterly Report on Form 10-Q, the Company has accrued an estimate of the probable costs for the resolution of these claims. This estimate has been developed based on the current stage of negotiations and data from the Company’s environmental engineering consultants. Management does not believe these proceedings will have a further material adverse effect on the Company’s consolidated financial position, except as discussed in Note 12. As with litigation, generally the outcome is inherently uncertain. It is possible, however, that future results of operations for any particular quarterly or annual period could be materially affected by changes in these assumptions, or the effectiveness of these strategies, related to these proceedings.

Goodwill

The Company has allocated its adjusted goodwill balance to its reporting units. The Company tests goodwill for impairment annually at fiscal year-end and in interim periods if certain events occur indicating that the carrying value of goodwill may be impaired, such as a significant adverse change in business climate, an adverse action or assessment by a regulator or the decision to sell a business, that would make it more likely than not that an impairment may have occurred. The goodwill impairment test is a two-step process. The first step of the impairment analysis compares the fair value to the net book value. In determining fair value, the accounting guidance allows for the use of several valuation methodologies, although it indicates that quoted market prices are the best evidence of fair value. The Company uses a combination of expected present values of future cash flows and comparative market multiples. It has also performed a review of market capitalization with estimated control premiums at December 31, 2012. If the fair value of a reporting unit is less than its net book value, the Company would perform a second step in its analysis, which compares the implied fair value of goodwill to its carrying amount. If the carrying amount of goodwill exceeds its implied fair value, the Company recognizes an impairment loss equal to that excess amount. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units and determining the fair value of each reporting unit. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount and growth rates, operating margins and working capital requirements, selecting comparable companies within each reporting unit and market and determining control premiums. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. There were no impairment charges for the six months ended 2013 and 2012. As of June 30, 2013 and December 31, 2012, goodwill totaled $22,726,000 and $22,735,000 (representing 20% and 21% of total assets), respectively.

As of the testing conducted as of December 31, 2012, the Company concluded that no impairment charge was warranted. However, there can be no assurance that the economic conditions currently affecting the world economy or other events may not have a negative material impact on the long-term business prospects of any of the Company’s reporting units. In such case, the Company may need to record an impairment loss, as stated above. The next annual impairment test will be conducted as of December 31, 2013, unless management identifies a triggering event in the interim.

Management has not identified any triggering events, as defined by ASC 350 “Intangibles – Goodwill and Other,” during 2013. Accordingly, no interim impairment test has been performed.

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Impairment Of Long-Lived And Intangible Assets

The Company’s long-lived and intangible assets primarily consist of fixed assets, goodwill and other intangible assets. The Company periodically reviews the carrying value of its long-lived assets held and used, other than goodwill and intangible assets with indefinite lives, and assets to be disposed of whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses the recoverability of the asset by estimated cash flows and at times by independent appraisals. It compares estimated cash flows expected to be generated from the related assets, or the appraised value of the asset, to the carrying amounts to determine whether impairment has occurred. If the estimate of cash flows expected to be generated changes in the future, the Company may be required to record impairment charges that were not previously recorded for these assets. If the carrying value of a long-lived asset is considered impaired, an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value. Asset impairment evaluations are by nature highly subjective.

Environmental Expenditures

The Company is subject to United States, Mexican, Chinese and United Kingdom environmental laws and regulations concerning emissions to the air, discharges to surface and subsurface waters, and generation, handling, storage, transportation, treatment and disposal of waste materials. The Company is also subject to other federal, state and local environmental laws and regulations, including those that require it to remediate or mitigate the effects of the disposal or release of certain chemical substances at various sites, mostly at sites where the Company has ceased operations. It is impossible to predict precisely what effect these laws and regulations will have in the future.

Expenditures that relate to current operations are charged to expense or capitalized, as appropriate. Expenditures that relate to an existing condition caused by formerly owned operations are expensed and recorded as part of discontinued operations, net of tax. Expenditures include costs of remediation, consulting, legal fees to defend against claims for environmental liability and certain costs to assist the Company with compliance matters and administrative tasks. Liabilities are recorded when remedial efforts are probable and the costs can be reasonably estimated. The liability for remediation expenditures includes, as appropriate, elements of costs such as site investigations, consultants’ fees, feasibility studies, outside contractor expenses, monitoring expenses, and certain potential claims. Estimates are not discounted and they are not reduced by potential claims for recovery from insurance carriers. The Company does not currently have any outstanding claims against insurance carriers related to remediation expenditures. The liability is periodically reviewed and adjusted to reflect current remediation progress, prospective estimates of required activity and other relevant factors, including changes in technology or regulations. For additional information related to environmental matters, see Note 15 of the Notes to the Consolidated Financial Statements included in Part IV of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and Note 12 to this Quarterly Report.

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The above listing is not intended to be a comprehensive list of all of the Company’s accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP with no need for management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternatives would not produce a materially different result. For a discussion of accounting policies and other disclosures required by GAAP, see the Company’s audited Consolidated Financial Statements and Notes thereto included in Part IV of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and Part 1 to this Quarterly Report.

Liquidity And Capital Resources

	June 30, 2013		December 31, 2012		$ Variance			% Variance
	(in thousands)
Cash and cash equivalents	$	974	$	3,196	$	(2,222	)		(70	%)
Bank debt	$	2,490	$	—	$	2,490			100	%
Working capital	$	28,578	$	26,309	$	2,269			9	%
Shareholders’ equity	$	55,138	$	50,432	$	4,706			9	%

The Company’s liquidity needs have related to, and are expected to continue to relate to, capital investments, product development costs, acquisitions, working capital requirements, and certain environmental and legal remediation costs. The Company has met its liquidity needs primarily through cash generated from operations and, to a lesser extent, through bank borrowings. The Company believes that cash provided by operating activities from continuing operations and funding available under the 2012 Credit Facility will be adequate to service debt and meet working capital needs, capital investment requirements, and product development requirements for the next twelve months.

At June 30, 2013, the Company reported $974,000 of cash, compared to $3,196,000 of cash and cash equivalents as of December 31, 2012. Cash and cash equivalents decreased in 2013 primarily due to $2,934,000 of cash used in operating activities from discontinued operations and $1,863,000 of cash used in investing activities, which were partially offset by $1,930,000 of cash provided by financing activities and $621,000 of cash provided by operating activities from continuing operations.

Cash used in operating activities from discontinued operations during the six month period ended June 30, 2013 was $2,934,000 as compared to cash used in operating activities from discontinued operations of $513,000 during the six month period ended June 30, 2012. Cash used in operating activities from discontinued operations during 2013 was primarily related to a payment of $2,185,000, which included interest, for the EPA’s past cost for OU-2 and a portion of the EPA’s past cost for OU-1 according to the terms set forth in the Consent Decree (See Note 12 – Commitments and Contingencies for the terms and conditions of the Consent Decree). The remaining payments in 2013 and the payments in 2012 were related to environmental remediation costs, consulting fees, and legal expenses associated with the past operations of the Company’s five environmental sites.

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Net cash provided by operating activities from continuing operations during the six month period ended June 30, 2013 was $621,000 as compared to net cash provided by operating activities from continuing operations of $11,251,000 during the six month period ended June 30, 2012. The primary source of cash from operating activities for the six month period ended June 30, 2013 was income from continuing operations of $5,236,000. In addition, depreciation and amortization expense of $1,215,000, non-cash stock compensation expense of $332,000, and a loss on foreign exchange contracts of $327,000 were added to income from continuing operations. These sources of cash from operating activities were partially offset by an increase in inventory of $2,507,000, an increase in accounts receivable of $1,820,000, an increase in other assets of $1,049,000, and a decrease in accounts payable of $1,045,000. The largest increases in inventory occurred at SLPE and TEAL, which were partially offset by a large decrease at MTE. The increase at SLPE was primarily due to delays in customer shipments until the third quarter of 2013. The increase at TEAL was primarily due to the rollout of several new products in 2013. The decrease in inventory at MTE was primarily due to an increase in sales during the second quarter of 2013 as compared to the fourth quarter of 2012 coupled with the completion of a large domestic customer project during the second quarter of 2013. The largest increases in accounts receivable occurred at SL-MTI and MTE, which were partially offset by large decrease at RFL. The increases at SL-MTI and MTE were primarily due to an increase in sales during the second quarter of 2013 as compared to the fourth quarter of 2012 while the decrease at RFL was primarily due to a decrease in sales during the second quarter of 2013 as compared to the fourth quarter of 2012. The increase in other assets was primarily due to an increase in payments related to purchase agreements for copper at MTE and TEAL. The increase in other assets was also due to the renewal of certain insurance policies during the first half of 2013. The largest decrease in accounts payable occurred at SLPE, which was partially offset by large increase at SL-MTI. The decrease at SLPE was primarily due to the extending of 2012 payments until 2013. The increase in accounts payable at SL-MTI was primarily due to a large payment in December 2012 without a comparable payment in June 2013.

Net cash provided by operating activities from continuing operations during the six month period ended June 30, 2012 was $11,251,000. The sources of cash from operating activities for the six month period ended June 30, 2012 were income from continuing operations of $2,854,000, an increase in other accrued liabilities of $3,333,000, a decrease in account receivable of $3,297,000, and an increase in accounts payable of $1,216,000. In addition, depreciation and amortization expense of $1,372,000 and non-cash stock compensation expense of $744,000 were added to income from continuing operations. The Company’s increase in other accrued liabilities was primarily due to the timing of payments related to the modified “Dutch Auction” tender (the “Tender Offer”). The aggregate purchase price of $4,147,000, excluding transaction costs, for the Tender Offer was accrued for as of June 30, 2012 since the expiration date of the Tender Offer was June 27, 2012 but payment was not made until July 5, 2012 according to the terms of the Tender Offer. The largest decreases in accounts receivable occurred at SLPE, TEAL and RFL. The decrease at SLPE was primarily due to a VAT refund in China of $1,625,000. The decrease at RFL was primarily due to decreased sales during 2012. The decrease at TEAL was primarily due to increased efforts to decrease collection times with large customers. The largest increases in accounts payable occurred at MTE, SL-MTI, and TEAL due primarily to increased inventory purchases to meet anticipated customer demand during the second half of 2012 coupled with increased efforts to extended payment terms with suppliers. These increases were partially offset by a decrease in accounts payable at SLPE. The decrease at SLPE was primarily due to a decrease in inventory purchases due to a decreased backlog. These sources and add-backs were partially offset by a $1,004,000 increase in other assets. All operating entities experienced increases in other assets due primarily to the renewal of certain insurance policies during the first half of 2012. The increase in other assets was also due to an increase in payments related to inventory purchase agreements for copper at MTE and TEAL.

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Net cash used in investing activities during the six month period ended June 30, 2013 was $1,863,000 as compared to net cash used in investing activities of $1,790,000 during the six month period ended June 30, 2012. Cash used in investing activities during 2013 was for the purchases of property, plant and equipment of $1,801,000 and for the purchase of other assets of $62,000. Purchases of property, plant and equipment were primarily used to upgrade production capabilities and technology and to acquire new production equipment in Mexico. Purchases of other assets were primarily related to the purchase of software. Cash used in investing activities during 2012 was for the purchases of property, plant and equipment of $879,000, the acquisition of certain assets of a business of $756,000, and for the purchase of other assets of $155,000. Purchases of property, plant and equipment were primarily used to upgrade production capabilities and technology. Purchases of other assets were primarily related to the purchase of software and the capitalization of legal fees related to a new patent application at MTE.

On February 27, 2012, the Company purchased certain assets of Pro-Dex Astromec, Inc. (“Astromec”), a subsidiary of Pro-Dex Inc. (“Pro-Dex”), for approximately $1,050,000, which includes the assumption of liabilities for an estimated earn-out of $294,000. The earn-out is comprised of quarterly payments based on the performance of the acquired business over the three year period immediately following the date of acquisition. The acquisition was paid in cash.

Net cash provided by financing activities during the six month period ended June 30, 2013 was $1,930,000 as compared to net cash used in financing activities of $6,688,000 during the six month period ended June 30, 2012. Cash provided by financing activities during 2013 was primarily related to $2,490,000 of net borrowings under the 2012 Credit Facility and proceeds from the stock option exercises, which were partially offset by the purchase of Company stock pursuant to the Company’s 2010 Repurchase Plan (described in Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds) in the amount of $792,000. Cash used in financing activities during 2012 was primarily related to the repurchase and retirement of common stock pursuant to the Company’s Tender Offer and the purchase of Company stock pursuant to the Company’s 2010 Repurchase Plan.

On August 9, 2012, the Company entered into the 2012 Credit Facility with PNC Bank to replace its Amended and Restated Revolving Credit Agreement with Bank of America, N.A., as amended (the “2008 Credit Facility”). The 2012 Credit Facility provides for borrowings up to $40,000,000 and under certain conditions maximum borrowings up to $70,000,000. The 2012 Credit Facility included a $5,000,000 sublimit for letters of credit (subsequently amended on March 11, 2013) and provides for a separate $10,700,000 letter of credit which expires one year from the date of closing, with annual extensions. The 2012 Credit Facility expires on August 9, 2016 (See Note 9 – Debt for the terms and conditions of the 2012 Credit Facility).

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As of June 30, 2013, the Company had an outstanding balance of $2,490,000 under the 2012 Credit Facility. As of December 31, 2012, the Company had no outstanding balance under the 2012 Credit Facility. At June 30, 2013 and December 31, 2012, the Company had total availability under the 2012 Credit Facility of $37,026,000 and $39,510,000, respectively. The Company’s percentage of total debt to total shareholders’ equity was 4.5% as of June 30, 2013.

The Company’s current ratio was 1.80 to 1 at June 30, 2013 and 1.76 to 1 at December 31, 2012. Current assets increased by $3,191,000 from December 31, 2012, while current liabilities increased by $922,000 during the same period.

Capital expenditures were $1,801,000 in 2013, which represented an increase of $922,000 from the capital expenditure levels of 2012. The Company anticipates spending approximately $1,900,000 on property, plant and equipment, used primarily to upgrade production capabilities and upgrade technology, during the remainder of 2013. The 2013 capital additions are expected to be funded primarily through cash from operating activities.

With the exception of the segment reported as “Unallocated Corporate Expenses” (which consists primarily of corporate office expenses, financing activities, certain treasury, risk management, legal, litigation, public reporting costs, legacy costs and costs not specifically allocated to the reportable business segments), all of the Company’s operating segments recorded income from operations for the six months ended June 30, 2013.

Contractual Obligations

The following is a summary of the Company’s contractual obligations at June 30, 2013 for the periods indicated:

	Less Than 1 Year		1 to 3 Years		3 to 5 Years		After 5 Years		Total
	(in thousands)
Debt (1)	$	2,495	$	—	$	—	$	—	$	2,495
Operating leases		456		2,458		1,599		1,343		5,856
Payments to EPA (2)		2,208		4,365		2,158		—		8,731
	$	5,159	$	6,823	$	3,757	$	1,343	$	17,082

⁽¹⁾  Includes interest payments through maturity of $5,000. Interest payments on debt are based on interest rates as of June 30, 2013.

⁽²⁾ In accordance with the Consent Decree, the Company has agreed to pay a fixed sum for the EPA’s past cost for OU-2 and a portion of the EPA’s past cost for OU-1. The payments are to be made in five equal payments of $2,141,000, for a total $10,705,000, plus interest. On May 10, 2013, the Company made the first payment related to its obligation under the Consent Decree in the amount of $2,185,000, which included interest. The next four payments will be made on the anniversary of the first payment plus ten days in the same amount of $2,141,000, plus interest (See Note 12 – Commitments and Contingencies for the terms and conditions of the Consent Decree).

The table above excludes the Company’s gross liability for uncertain tax positions of $710,000, including accrued interest and penalties, which totaled $82,000 as of June 30, 2013, since the Company cannot predict with reasonable reliability the timing or certainty of cash settlements to the respective taxing authorities.

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Off-Balance Sheet Arrangements

It is not the Company’s usual business practice to enter into off-balance sheet arrangements such as guarantees on loans and financial commitments, indemnification arrangements and retained interests in assets transferred to an unconsolidated entity for securitization purposes. Consequently, the Company has no off-balance sheet arrangements which have, or are reasonably likely to have, a material current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, except for operating lease commitments disclosed in the table above and inventory purchase commitments.

In an attempt to stabilize copper costs, the Company has in the past, and may in the future, enter into purchase agreements for copper. As of June 30, 2013, inventory purchase agreements for copper totaled $1,660,000. As of June 30, 2013, no purchase commitments for copper were greater than six months.

Results of Operations

Three months ended June 30, 2013, compared with three months ended June 30, 2012

The tables below show the comparisons of net sales and income from operations for the quarter ended June 30, 2013 (“2013”) and the quarter ended June 30, 2012 (“2012”):

	Net Sales
	Three Months Ended June 30, 2013		Three Months Ended June 30, 2012		$ Variance From Same Quarter Last Year			% Variance From Same Quarter Last Year
	(in thousands)
SLPE	$	18,386	$	18,824	$	(438	)		(2	%)
High Power Group		17,607		15,896		1,711			11
SL-MTI		9,060		9,077		(17	)		N/M
RFL		4,733		5,102		(369	)		(7	)
Net sales	$	49,786	$	48,899	$	887			2	%

	Income from Operations
	Three Months Ended June 30, 2013			Three Months Ended June 30, 2012			$ Variance From Same Quarter Last Year			% Variance From Same Quarter Last Year
	(in thousands)
SLPE	$	1,131		$	479		$	652			136	%
High Power Group		2,038			1,585			453			29
SL-MTI		1,569			1,441			128			9
RFL		393			578			(185	)		(32	)
Unallocated Corporate Expenses		(1,500	)		(1,738	)		238			14
Income from operations	$	3,631		$	2,345		$	1,286			55	%

N/M – Not material.

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During 2013, consolidated net sales increased by $887,000, or 2%, compared to net sales during the second quarter of 2012. When compared to 2012, net sales of SLPE decreased by $438,000, or 2%; net sales of the High Power Group increased by $1,711,000, or 11%; net sales of SL-MTI decreased by $17,000, or less than 1%; and net sales at RFL decreased by $369,000, or 7%.

In 2013, the Company’s income from operations increased by $1,286,000 from $2,345,000 in 2012 to $3,631,000 in 2013. Income from operations was 7% of net sales in 2013, compared to 5% of net sales in 2012. All of the Company’s operating entities recorded income from operations in 2013 and 2012. In addition, Unallocated Corporate Expenses decreased by $238,000, or 14%, in 2013 compared to 2012.

Income from continuing operations in 2013 was $2,252,000, or $0.54 per diluted share, compared to income from continuing operations in 2012 of $1,410,000, or $0.32 per diluted share. Income from continuing operations was approximately 5% of net sales in 2013, compared to income from continuing operations of 3% of net sales in 2012.

The Company’s business segments and the components of operating expenses are discussed in the following sections.

SLPE

SLPE recorded net sales of $18,386,000 or 37% of consolidated net sales in 2013, compared to $18,824,000, or 38% of consolidated net sales in 2012. At SLPE, sales of the industrial product line decreased by $958,000, or 27%, and sales of the data communications product line decreased by $595,000, or 20%, which were partially offset by an increase in sales of the medical equipment product line of $1,106,000, or 9%. The decrease in sales in the industrial product line was primarily due to decreased distributor sales to several domestic industrial customers due to a general decline in demand in this market. The decrease was also due to a decrease in sales volumes to one large international customer during 2013. The decrease in sales of the data communications product line was primarily due to decreased sales volumes to a large domestic distributor, coupled with decreased sales to two large domestic customers. The increase in sales of the medical equipment product line was primarily due to increased sales volumes to several domestic distributors and increased sales volumes to several international customers, which were partially offset by a decrease in sales to a large domestic distributor. Returns and distributor credits also negatively affected net sales, which represented approximately 2% and 1% of SLPE gross sales in 2013 and 2012, respectively. Domestic sales decreased by 5% and international sales increased by 5% during 2013.

SLPE reported income from operations of $1,131,000 in 2013, compared to $479,000 in 2012. Income from operations increased in 2013 primarily due to an improvement in cost of products sold as a percentage of net sales and a decrease in operating costs, which was partially offset by a 2% decrease in sales. Cost of products sold as a percentage of net sales improved approximately 2% during 2013. Operating costs decreased by approximately $429,000, or 9%, during 2013, primarily due to a decrease in selling, general and administrative expenses of $529,000 and a decrease in depreciation and amortization expense of $61,000, which were partially offset by an increase in engineering and product development costs of $161,000.

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High Power Group

The High Power Group reported net sales of $17,607,000, or 35% of consolidated net sales in 2013, compared to $15,896,000, or 33% of consolidated net sales in 2012. The increase in net sales during 2013 was due to an increase in net sales at MTE of $1,598,000, or 19% and an increase in net sales at TEAL of $113,000, or 2%.

MTE’s sales increase during 2013 was primarily attributable to an increase in filter sales to the oil industry and an increase in sales to the mining industry. Domestic sales increased by 31% while international sales decreased by 11%. The increase in domestic sales was primarily due to increased filter sales to two large customers in the oil industry and increased sales to a large customer in the mining industry. The decrease in international sales was primarily due to decreased sales to a large customer in the oil industry located in South America.

TEAL’s sales increase was primarily attributable to an increase in sales to customers in the solar market of $114,000, an increase in sales to the semi-conductor market of $96,000, and an increase in sales to the military and aerospace markets of $42,000, which were partially offset by a decrease in sales to the medical imaging equipment market of $146,000. Sales to customers in the solar market increased during 2013 primarily due to increased sales to two new large domestic customers. The increase in the semi-conductor market was primarily driven by sales of new products to a large international customer, partially offset by a decrease in sales to a large international customer. Sales to military and aerospace customers increased during 2013 primarily due to increased volumes to several domestic customers, partially offset by decreased sales to a large domestic customer. The decrease in sales to the medical imaging equipment market was primarily due to a general decline in demand in this market. Domestic sales decreased by 2%, and international sales increased by 19% during 2013.

The High Power Group reported income from operations of $2,038,000 in 2013, which represented an increase of 29% from 2012. The increase in income from operations during 2013 was due to an increase at MTE of $722,000, which was partially offset by a decrease of $269,000 at TEAL. The increase in the High Power Group’s income from operations was due to an increase in sales of 11% and a decrease in cost of products sold as a percentage of net sales, which were partially offset by an increase in operating expenses. Cost of products sold as a percentage of net sales improved by approximately 1% during 2013. Operating costs increased by $315,000, or 10%, during 2013 primarily due to an increase in engineering and product development costs of $262,000 and an increase in selling, general and administrative expenses of $79,000, which were partially offset by a decrease in depreciation and amortization expenses of $26,000.

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SL-MTI

SL-MTI recorded net sales of $9,060,000, or 18% of consolidated net sales in 2013, compared to $9,077,000, or 19% of consolidated net sales in 2012. Sales to customers in the commercial aerospace industry decreased $520,000, or 13%, and sales of medical products decreased $12,000 or 5%, which were partially offset by an increase in sales of other commercial products of $433,000, or 103%, and an increase in sales to the defense industry of $82,000, or 2%. Domestic sales increase by 5% and international sales decreased by 44% during 2013. The increase in domestic sales was primarily due increased sales volumes to military customers and increased down hole exploration sales in the oil and gas market, which were partially offset by decreased sales to several customers in the commercial aerospace industry. The decrease in international sales was primarily related to decreased volumes to military customers located in Canada and the United Kingdom.

SL-MTI reported income from operations of $1,569,000 in 2013, which represented an increase of 9% from 2012. The increase was primarily due to a 1% improvement in cost of products sold as a percentage of net sales and a decrease in operating costs. Operating costs decreased by 1% due to a decrease in selling, general and administrative expenses of $274,000, which was partially offset by an increase of $250,000 in engineering and product development costs and a $13,000 increase in depreciation and amortization expenses. During the second quarter of 2012, SL-MTI recorded $222,000 of direct costs related to the Astromec acquisition.

RFL

RFL recorded net sales of $4,733,000, or 10% of consolidated net sales in 2013, compared to $5,102,000, or 10% of consolidated net sales in 2012. Sales of RFL’s protection products decreased by $232,000, or 9%, sales of communications products decreased by $129,000, or 6%, and customer service sales decreased by $8,000, or 3%. The decrease in protection products was primarily due to two large international customer projects in 2012 without projects of comparable size in 2013. The decrease in the communications product line during 2013 was primarily due to decreased utility ethernet transport sales during 2013. Domestic sales decreased by $68,000, or 2%, while international sales decreased by $301,000, or 32%.

RFL reported income from operations of $393,000 in 2013, which represented a decrease of 32% from 2012. Income from operations decreased in 2013 due primarily to a 7% decrease in sales and an increase in cost of products sold as a percentage of net sales, which was partially offset a decrease in operating costs. Cost of products sold as a percentage of net sales increased 1% during 2013. Operating costs decreased by 2% due to a $69,000 decrease in selling, general and administrative expenses and a $19,000 decrease in depreciation and amortization expenses, which were partially offset by a $45,000 increase in engineering and product development expenses.

Cost of Products Sold

Cost of products sold was approximately 66% of net sales in 2013, compared to 67% for the quarter ended 2012. Cost of products sold as a percentage of net sales decreased 1% while net sales increased 2% during 2013.

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SLPE, the High Power Group and SL-MTI each recorded an improvement in cost of products sold as a percentage of net sales, while RFL recorded an increase in cost of products sold as a percentage of net sales. SLPE’s cost of products sold as a percentage of net sales decreased by approximately 2% during 2013 primarily due to a favorable sales mix, a favorable product mix due to the introduction of new products into the market, and a change in estimate to increase the inventory reserve during the second quarter of 2012. The High Power Group recorded a 1% decrease in its cost of products sold as a percentage of net sales due to a 3% decrease at MTE, which was partially offset by a 2% increase at TEAL. The decrease in cost of products sold as a percentage of net sales at MTE was primarily due to a decrease in raw materials costs, improved product mix, and increased sales levels which improved overhead absorption. The decrease at MTE was also due to a shift in labor to Mexico. The increase in cost of products sold as a percentage of net sales at TEAL was primarily due to an unfavorable sales mix, which was partially offset by decreased materials and fixed overhead costs. During 2013, SL-MTI recorded a 1% decrease in its cost of products sold as a percentage of net sales primarily due to a more favorable sales mix and lower commodity costs. The decrease at SL-MTI was also due to increased costs incurred during the second quarter of 2012 due to Astromec integration costs. Cost of products sold as a percentage of net sales increased by 1% at RFL primarily due to unfavorable overhead variances due to decreased volumes. All operating entities are at various stages of emphasizing lean initiatives throughout the factory floor to reduce costs of products sold.

Engineering and Product Development Expenses

Engineering and product development expenses were approximately 7% of net sales in 2013 compared to 6% in 2012. Engineering and product development expenses increased by $718,000, or 24%, during the second quarter of 2013 primarily due to an increase of $262,000 at the High Power Group, an increase of $250,000 at SL-MTI, an increase of $161,000 at SLPE and an increase of $45,000 at RFL. The increase in engineering and product development costs at the High Power Group was primarily due to increased new product development costs at TEAL and an increase in engineering staff and employee compensation costs at MTE. The increase in engineering and product development costs at SL-MTI was primarily due to a decrease in customer funding received for prototype projects and an increase in engineering personnel during 2013. The increase in engineering and product development costs at SLPE was primarily due to an increase in other compensation costs and consulting fees, partially offset by the reduction of engineering staff in 2012 associated with the implementation of a prior year restructuring plan. Engineering and product development costs at RFL increased primarily due to an increase in new product development costs primarily in the communications product line.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were approximately 18% of net sales for 2013, compared to 21% in 2012. During 2013, selling, general and administrative expenses decreased by $1,033,000, or 10%, while sales increased by 2%. Selling, general and administrative expenses at SLPE decreased by $529,000 in 2013 primarily due to consulting and legal fees incurred in 2012 related to the China Investigation. Selling, general and administrative expenses at SL-MTI decreased by $274,000 primarily due to direct acquisition costs incurred in 2012 related to the Astromec acquisition. Selling, general and administrative expenses at RFL decreased by $69,000 primarily due to lower staffing levels partially associated with the implementation of a prior year restructuring plan. The High Power Group recorded an increase in selling, general and administrative expenses of $79,000 primarily due to an increase at MTE. The increase at MTE was due to increased employee compensation costs related to increased commissions on higher sales volumes, which were partially offset by litigation costs in 2012. Selling, general and administrative expenses at TEAL were relatively flat during 2013. Unallocated Corporate Expenses decreased by $238,000 primarily due to lower stock based compensation costs during the second quarter of 2013.

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Depreciation And Amortization Expenses

Depreciation and amortization expenses in 2013 were $615,000, a decrease of $92,000, or 13%, compared to depreciation and amortization expenses in 2012.

Amortization of Deferred Financing Costs

In connection with entering into the 2012 Credit Facility and related amendments, the Company incurred deferred financing costs which are amortized over the term of the 2012 Credit Facility. In connection with entering into the 2008 Credit Facility and related waivers and amendments, which expired on August 9, 2012, the Company incurred deferred financing costs which were amortized over the term of the 2008 Credit Facility. During 2013 and 2012, the amortization of deferred financing costs equaled $20,000 and $39,000, respectively.

Interest Expense

Interest expense in 2013 was $15,000 compared to $9,000 in 2012. The increase in interest expense in 2013 was primarily due to increased borrowings under the Company’s 2012 Credit Facility during 2013 compared to borrowings during the same period in 2012 under the Company’s 2008 Credit Facility. The Company had an outstanding balance of $2,490,000 as of June 30, 2013 under the 2012 Credit Facility, and no outstanding balance as of June 30, 2012 under the 2008 Credit Facility.

Other gain (loss), net

Other gain (loss), net in 2013 was a net loss of $301,000 compared to net loss of $162,000 in 2012. During 2012 and 2013, the Company entered into a series of foreign currency forward contracts to hedge its exposure to foreign exchange rate movements in its forecasted expenses in China and Mexico. The loss recognized in 2012 and 2013 represents the change in fair value of foreign currency forward contracts that are marked to market at quarter end.

Taxes (Continuing Operations)

The effective tax rate from continuing operations during 2013 was approximately 32% as compared to 34% during 2012. The decrease in the effective tax rate was due to an increase in international rate differences and foreign tax credits, which were partially offset by certain permanent adjustments. The effective tax rate also decreased due to the recording of a research and development tax benefit of $261,000 in 2013, which was primarily related to the retroactive reinstatement of the federal research and development tax credits from the enactment of the American Tax Relief Act of 2012. These credits were not available to the Company in 2012.

Discontinued Operations

During 2013, the Company recorded a loss from discontinued operations, net of tax, of $237,000, compared to a loss of $244,000, net of tax, in 2012. The loss from discontinued operations during 2013 and 2012 relates to environmental remediation costs, consulting fees, and legal expenses associated with the past operations of the Company’s five environmental sites (See Note 12 – Commitments and Contingencies for further information concerning the environmental sites).

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Net Income

Net income was $2,015,000, or $0.48 per diluted share, for 2013 compared to $1,166,000, or $0.26 per diluted share, for 2012. The weighted average number of shares used in the diluted earnings per share computation was 4,204,000 and 4,457,000 for 2013 and 2012, respectively.

Results of Operations

Six months ended June 30, 2013, compared with six months ended June 30, 2012

The tables below show the comparisons of net sales and income from operations for the six months ended June 30, 2013 (“2013”) and the six months ended June 30, 2012 (“2012”):

	Net Sales
	Six Months Ended June 30, 2013		Six Months Ended June 30, 2012		$ Variance From Same Period Last Year			% Variance From Same Period Last Year
	(in thousands)
SLPE	$	35,980	$	37,167	$	(1,187	)		(3	%)
High Power Group		34,700		31,471		3,229			10
SL-MTI		18,154		18,676		(522	)		(3	)
RFL		10,047		10,925		(878	)		(8	)
Net sales	$	98,881	$	98,239	$	642			1	%

	Income from Operations
	Six Months Ended June 30, 2013			Six Months Ended June 30, 2012			$ Variance From Same Period Last Year			% Variance From Same Period Last Year
	(in thousands)
SLPE	$	2,181		$	268		$	1,913			714	%
High Power Group		4,152			2,950			1,202			41
SL-MTI		2,882			3,144			(262	)		(8	)
RFL		1,329			1,636			(307	)		(19	)
Unallocated Corporate Expenses		(2,927	)		(3,281	)		354			11
Income from operations	$	7,617		$	4,717		$	2,900			61	%

During 2013, consolidated net sales increased by $642,000 or 1%, compared to net sales during 2012. When compared to 2012, net sales of SLPE decreased by $1,187,000, or 3%; net sales of the High Power Group increased by $3,229,000, or 10%; net sales of SL-MTI decreased by $522,000, or 3%; and net sales at RFL decreased by $878,000, or 8%.

In 2013, the Company’s income from operations increased by $2,900,000 from $4,717,000 in 2012 to $7,617,000 in 2013. Income from operations was 8% of net sales in 2013, compared to 5% of net sales in 2012. All of the Company’s operating entities recorded income from operations in 2013 and 2012. In addition, Unallocated Corporate Expenses decreased by $354,000, or 11%, in 2013 compared to 2012.

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Income from continuing operations in 2013 was $5,236,000 or $1.25 per diluted share, compared to income from continuing operations in 2012 of $2,854,000, or $0.63 per diluted share. Income from continuing operations was approximately 5% of net sales in 2013, compared to income from continuing operations of 3% of net sales in 2012.

The Company’s business segments and the components of operating expenses are discussed in the following sections.

SLPE

SLPE recorded net sales of $35,980,000 or 36% of consolidated net sales in 2013, compared to $37,167,000, or 38% of consolidated net sales in 2012. At SLPE, sales of the industrial product line decreased by $1,413,000, or 23%, and sales of the data communications product line decreased by $1,067,000, or 18%, which were partially offset by an increase in sales of the medical equipment product line of $1,220,000, or 5%. The decrease in sales in the industrial product line was primarily due to decreased distributor sales to several domestic industrial customers due to a general decline in demand in this market. The decrease was also due to a decrease in sales volumes to one large international customer during 2013. The decrease in sales of the data communications product line was primarily due to decreased sales volumes to a large domestic distributor, coupled with decreased sales to several large domestic customers. The increase in sales of the medical equipment product line was primarily due to increased sales volumes to several domestic distributors and increased sales volumes to several international customers, which were partially offset by a decrease in sales to a large domestic distributor. Returns and distributor credits also negatively affected net sales, which represented approximately 1% and 2% of SLPE gross sales in 2013 and 2012, respectively. Domestic sales decreased by 8% and international sales increased by 16% during 2013.

SLPE reported income from operations of $2,181,000 in 2013, compared to $268,000 in 2012. Income from operations increased in 2013 primarily due to an improvement in cost of products sold as a percentage of net sales and a decrease in operating costs, which was partially offset by a 3% decrease in sales. Cost of products sold as a percentage of net sales improved by 3% as a percentage of net sales during 2013. Operating costs decreased by approximately $1,064,000, or 11%, during 2013, primarily due to a decrease in selling, general and administrative expenses of $970,000, and a decrease in depreciation and amortization expense of $119,000. Included in cost of products sold and operating costs during 2013 are $535,000 ($428,000 recorded in cost of products sold and $107,000 recorded in selling, general and administrative expenses) of incremental costs related to a work stoppage in China. Also, SLPE incurred $802,000 in legal and accounting fees related to the FCPA investigation in China in 2012 that were not repeated in 2013.

High Power Group

The High Power Group reported net sales of $34,700,000, or 35% of consolidated net sales in 2013, compared to $31,471,000, or 32% of consolidated net sales in 2012. The increase in net sales during 2013 was due to an increase in net sales at MTE of $4,105,000, or 25%, which was partially offset by a decrease at TEAL of $876,000, or 6%.

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MTE’s sales increase during 2013 was primarily attributable to an increase in filter sales to the oil industry and an increase in sales to the shipboard marine market. Domestic sales increased by 36% while international sales decreased by 3%. The increase in domestic sales was primarily due to increased filter sales to two large customers in the oil industry and increased sales to the shipboard marine market. The decrease in international sales was primarily due to decreased sales to a large customer in the oil industry located in South America, which was partially offset by increased sales to two large customers in the mining market and a large customer in the general industrial market.

TEAL’s sales decrease was primarily attributable to a decrease in sales to the medical imaging equipment market of $684,000, a decrease in sales to the semi-conductor market of $177,000 and a decrease in sales to the military and aerospace markets of $119,000, which were partially offset by an increase in sales to customers in the solar market of $99,000. The decrease in sales to the medical imaging equipment market was primarily due to decreased orders from a large domestic customer coupled with a general decline in demand in this market. The decrease in the semi-conductor market was primarily driven by a decrease in sales to several domestic customers and a large international customer, which was partially offset by sales of a new product to a large international customer. Sales to military and aerospace customers decreased during 2013 primarily due to decreased volumes to two large domestic customers, which were partially offset by increased sales to several domestic customers. Sales to customers in the solar market increased during 2013 primarily due to increased sales to two new large domestic customers. Domestic sales decreased by 8%, and international sales increased by 6% during 2013.

The High Power Group reported income from operations of $4,152,000 in 2013, which represented an increase of 41% from 2012. The increase in income from operations during 2013 was due to an increase at MTE of $1,871,000, which was partially offset by a decrease of $669,000 at TEAL. The increase in the High Power Group’s income from operations was due to an increase in sales of 10% and a decrease in cost of products sold as a percentage of net sales, which were partially offset by an increase in operating expenses. Cost of products sold as a percentage of net sales improved by approximately 2% during 2013. Operating costs increased by $564,000, or 9%, during 2013 primarily due to an increase in engineering and product development costs of $452,000 and an increase in selling, general and administrative expenses of $166,000, which were partially offset by a decrease in depreciation and amortization expenses of $54,000.

SL-MTI

SL-MTI recorded net sales of $18,154,000, or 19% of consolidated net sales in 2013, compared to $18,676,000, or 19% of consolidated net sales in 2012. Sales to customers in the commercial aerospace industry decreased by $538,000, or 7%, sales to the defense industry decreased by $455,000, or 5%, and sales of medical products decreased by $38,000, or 8%, which were partially offset by an increase in sales of other commercial products of $509,000, or 50%. Domestic sales decreased by 1% and international sales decreased by 17% during 2013. The decrease in domestic sales was primarily due to a decrease in sales volumes to several customers in the commercial aerospace industry, which was partially offset by increased down hole exploration sales in the oil and gas market. The decrease in domestic sales was also partially offset by $582,000 of non-comparable Astromec sales in 2013. The decrease in international sales was primarily related to decreased military sales to customers located in Australia and the United Kingdom.

50

SL-MTI reported income from operations of $2,882,000 in 2013, which represented a decrease of 8% from 2012. The decrease was primarily due to a 3% decrease in sales and an increase in operating costs, which was partially offset by a 1% improvement in cost of products sold as a percentage of net sales. Operating costs increased by 10% primarily due to an increase of $646,000 in engineering and product development costs and an increase of $59,000 in depreciation and amortization expenses, which were partially offset by a decrease in selling, general and administrative expenses of $381,000. SL-MTI recorded $422,000 of direct costs related to the Astromec acquisition during 2012.

RFL

RFL recorded net sales of $10,047,000, or 10% of consolidated net sales in 2013, compared to $10,925,000, or 11% of consolidated net sales in 2012. Sales of RFL’s protection products decreased by $480,000, or 9%, sales of communications products decreased by $214,000, or 5%, and customer service sales decreased by $184,000, or 29%. The decrease in protection products was primarily due to two large international customer projects in 2012 without projects of comparable size in 2013. The decrease in the communications product line during 2013 was primarily due to decreased sales to a large domestic customer in the railroad industry and decreased utility ethernet transport sales during 2013, which were partially offset by increased sales related to a large new domestic project in 2013. Customer service sales, which are a relatively minor component of RFL’s sales, decreased primarily due to reduced spare parts sales to a domestic customer. Domestic sales decreased by $613,000, or 7%, and international sales decreased by $265,000, or 15%.

RFL reported income from operations of $1,329,000 in 2013, which represented a decrease of 19% from 2012. Income from operations decreased in 2013 due primarily to an 8% decrease in sales, which was partially offset by a decrease in operating costs. Operating costs decreased by 4% primarily due to a $196,000 decrease in selling, general and administrative expenses and a $43,000 decrease in depreciation and amortization expenses, which were partially offset by an increase of $76,000 in engineering and product development expenses. Cost of products sold as a percentage of net sales remained relatively the same as 2012.

Cost of Products Sold

Cost of products sold was approximately 66% of net sales in 2013, compared to 68% in 2012. Cost of products sold as a percentage of net sales decreased 2% while net sales increased by 1% during 2013.

SLPE, the High Power Group and SL-MTI each recorded an improvement in cost of products sold as a percentage of net sales. Cost of products sold as a percentage of net sales was relatively flat at RFL during 2013. SLPE’s cost of products sold as a percentage of net sales decreased by approximately 3% during 2013 primarily due to a favorable sales mix, a favorable product mix due to the introduction of new products into the market, a decrease in labor costs associated with the implementation of a prior year restructuring plan, decreased materials costs in China, and a change in estimate to increase the inventory reserve during 2012. The decrease in SLPE’s cost of products sold as a percentage of net sales was partially offset by $428,000 of additional costs incurred due to a work stoppage in China during March 2013. The High Power Group recorded a 2% decrease in its cost of products sold as a percentage of net sales due to a 4% decrease at MTE, which was partially offset by a 1% increase at TEAL. The decrease in cost of products sold as a percentage of net sales at MTE was primarily due to improved product mix and a decrease in commodity costs, primarily for copper and steel. The decrease at MTE was also due to a shift in labor to Mexico and increased sales levels, which improved overhead absorption.

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The improvements in cost of products sold as a percentage of net sales at MTE were partially offset by an increase in the inventory reserve during 2013. The increase in cost of products sold as a percentage of net sales at TEAL was primarily due to an unfavorable sales mix, which was partially offset by lower commodity costs and fixed overhead costs. During 2013, SL-MTI recorded a 1% decrease in its cost of products sold as a percentage of net sales primarily due to a more favorable sales mix and lower commodity costs. The decrease at SL-MTI was also due to increased costs incurred during the first six months of 2012 due to Astromec integration costs. All operating entities are at various stages of emphasizing lean initiatives throughout the factory floor to reduce costs of products sold.

Engineering and Product Development Expenses

Engineering and product development expenses were approximately 7% of net sales in 2013 compared to 6% in 2012. Engineering and product development expenses increased by $1,200,000, or 20%, during 2013 primarily due to an increase of $646,000 at SL-MTI, an increase of $452,000 at the High Power Group, and an increase of $76,000 at RFL, and an increase at SLPE of $26,000. The increase in engineering and product development costs at SL-MTI was primarily due to a decrease in customer funding received for prototype projects during 2013 coupled with an increase in prototype development costs. The increase in engineering and product development costs at the High Power Group was primarily due to increased new product development costs at TEAL and an increase in engineering staff and employee compensation costs at MTE. Engineering and product development costs at RFL increased primarily due to an increase in new product development costs primarily in the communications product line. The increase in engineering and product development costs at SLPE was primarily due to an increase in other compensation costs and consulting fees, partially offset by the reduction of engineering staff in 2012 associate with the implementation of a prior year restructuring plan.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were approximately 18% of net sales for 2013, compared to 20% in 2012. During 2013, selling, general and administrative expenses decreased by $1,737,000, or 9%, while sales increased by 1%. Selling, general and administrative expenses at SLPE decreased by $970,000 in 2013 primarily due to costs incurred for consulting and legal fees in 2012 related to the China Investigation. Selling, general and administrative expenses at SL-MTI decreased by $381,000 primarily due to direct acquisition costs incurred in 2012 related to the Astromec acquisition. Selling, general and administrative expenses at RFL decreased by $196,000 primarily due to lower staffing levels partially associated with the implementation of a prior year restructuring plan. The High Power Group recorded an increase in selling, general and administrative expenses of $166,000 primarily due to increased employee compensation costs related to increased commissions on higher sales volumes at MTE, which were partially offset by a decrease in compensation costs at TEAL and litigation costs in 2012 at MTE. Unallocated Corporate Expenses decreased by $354,000 primarily due to lower stock compensation expense, consulting expenses, and legal expenses in 2013.

Depreciation And Amortization Expenses

Depreciation and amortization expenses in 2013 were $1,215,000, a decrease of $157,000, or 11%, compared to depreciation and amortization expenses in 2012.

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Amortization of Deferred Financing Costs

In connection with entering into the 2012 Credit Facility and related amendments, the Company incurred deferred financing costs which are amortized over the term of the 2012 Credit Facility. In connection with entering into the 2008 Credit Facility and related waivers and amendments, which expired on August 9, 2012, the Company incurred deferred financing costs which were amortized over the term of the 2008 Credit Facility. During 2013 and 2012, the amortization of deferred financing costs equaled $39,000 and $72,000, respectively.

Interest Expense

Interest expense in 2013 was $50,000 compared to $31,000 in 2012. The increase in interest expense in 2013 was primarily due to increased borrowings under the Company’s 2012 Credit Facility during 2013 compared to borrowings during the same period in 2012 under the Company’s 2008 Credit Facility. The Company had an outstanding balance of $2,490,000 as of June 30, 2013 under the 2012 Credit Facility, and no outstanding balance as of June 30, 2012 under the 2008 Credit Facility.

Other gain (loss), net

Other gain (loss), net in 2013 was a net loss of $327,000 compared to net loss of $170,000 in 2012. During 2012 and 2013, the Company entered into a series of foreign currency forward contracts to hedge its exposure to foreign exchange rate movements in its forecasted expenses in China and Mexico. The loss recognized in 2012 and 2013 represents the change in fair value of foreign currency forward contracts that are marked to market.

Taxes (Continuing Operations)

The effective tax rate from continuing operations during 2013 was approximately 27% as compared to 36% during 2012. The decrease in the effective tax rate was due to an increase in international rate differences and foreign tax credits, which were partially offset by certain permanent adjustments. The effective tax rate also decreased due to the recording of a research and development tax benefit of $594,000 in 2013, which was primarily related to the retroactive reinstatement of the federal research and development tax credits from the enactment of the American Tax Relief Act of 2012. These credits were not available to the Company in 2012.

Discontinued Operations

During 2013, the Company recorded a loss from discontinued operations, net of tax, of $455,000, compared to a loss of $438,000, net of tax, in 2012. The loss from discontinued operations during 2013 and 2012 relates to environmental remediation costs, consulting fees, and legal expenses associated with the past operations of the Company’s five environmental sites (See Note 12 – Commitments and Contingencies for further information concerning the environmental sites).

Net Income

Net income was $4,781,000 or $1.14 per diluted share, for 2013 compared to $2,416,000, or $0.53 per diluted share, for 2012. The weighted average number of shares used in the diluted earnings per share computation was 4,189,000 and 4,518,000 for 2013 and 2012, respectively.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures,” as such term is defined in Rules 13a-15e and 15d-15e promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Conclusion of Evaluation

Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q.

Inherent Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the Company’s disclosure controls and procedures, management recognizes that any control, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the second quarter of 2013 that have materially affected or are reasonably likely to materially affect its internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note 12 of the Notes to the Consolidated Financial Statements included in Part I to this Quarterly Report on Form 10-Q. Also, see Note 15 of the Notes to the Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, for additional disclosure related to the Company’s legal proceedings.

ITEM 1A. RISK FACTORS

Not applicable.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On November 16, 2010, the Board of Directors authorized a plan that allows for the repurchase up to an aggregate of 470,000 shares of the Company’s outstanding common stock (the “2010 Repurchase Plan”). Any repurchases pursuant to the 2010 Repurchase Plan would be made in the open market or in negotiated transactions. During the first six months of 2013, the Company purchased approximately 33,000 shares of Company stock at an average price of $23.79 a share. As a result, as of June 30, 2013, approximately 297,000 shares remained available for purchase under the 2010 Repurchase Plan.

The following table presents information related to the repurchases of common stock that the Company made during the six months ended June 30, 2013:

Period	Total Number of Shares Purchased			Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares That  May Yet Be Purchased under Publicly Announced Plans or Programs
January 2013		—			—		—		330,000
February 2013		—			—		—		330,000
March 2013		—			—		—		330,000
April 2013		—			—		—		330,000
May 2013		19,000	(1)	$	23.02		19,000		311,000
June 2013		14,000	(1)	$	24.82		14,000		297,000
Total		33,000		$	23.79		33,000		297,000

⁽¹⁾  The number of shares purchased pursuant to the 2010 Repurchase Plan.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

2.1 Agreement and Plan of Merger, dated June 3, 2013, by and between SL Industries, Inc., a New Jersey corporation, and SL Industries, Inc., a Delaware corporation. Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on June 20, 2013.

3.1 Amended and Restated Certificate of Incorporation of SL Industries, Inc., a Delaware corporation. Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 20, 2013.

3.2 By-Laws of SL Industries, Inc., a Delaware corporation. Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on June 20, 2013.

10.1 Form of 2013 Restricted Shares Agreement, dated May 9, 2013, between the Company and each director of the Company. *

10.2 Second Amendment and Joinder to Credit Agreement and to Security Agreement, dated June 20, 2013, by and among the Company, subsidiaries of the Company, PNC Bank National Association, as administrative agent and lender, and the lenders from time to time party thereto, amending the Credit Agreement entered into as of August 9, 2012, by and among the Company, subsidiaries of the Company, PNC Bank, National Association, as administrative agent, and the lenders from time to time party thereto. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 20, 2013.

31.1 Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (transmitted herewith).

31.2 Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (transmitted herewith).

32.1 Certification by Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (transmitted herewith).

101.INS XBRL Instance Document. *

101.SCH XBRL Taxonomy Extension Schema Document. *

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. *

101.DEF XBRL Taxonomy Extension Definition Linkbase Document. *

101.LAB XBRL Taxonomy Extension Label Linkbase Document. *

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. *

* Filed herewith.

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SIGNATURES

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 thereunto duly authorized.

Date: August 01, 2013	SL INDUSTRIES, INC.
	(Registrant)
	By:	/s/ William T. Fejes
		William T. Fejes
		Chief Executive Officer (Principal Executive Officer)
	By:	/s/ Louis J. Belardi
		Louis J. Belardi
		Chief Financial Officer (Principal Accounting Officer)

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EX-10.1

Exhibit 10.1

Restricted Shares Agreement

May 9, 2013

To:

We are pleased to inform you that, effective on the date first written above (the “Grant Date”), the Compensation Committee (the “Committee”) of the Board of Directors of SL Industries, Inc. (the “Company”) granted you restricted shares of the Company’s Common Stock, $0.20 par value per share (“Common Stock”), in accordance with the Company’s 2008 Incentive Stock Plan, as amended (the “Plan”) and subject to the terms and conditions of this restricted share agreement (“Agreement”).

1. Grant. You have been granted an award of 3,000 whole shares of Common Stock, which shares (“Restricted Shares”) shall be subject to the terms, conditions, and restrictions specified in this Agreement and the Plan.

2. Certificates. Concurrently with the execution of this Agreement, (i) the Company shall issue a certificate, registered in your name, representing the Restricted Shares, and (ii) you shall deliver to the Company a duly executed stock power, endorsed in blank (attached), relating to the Restricted Shares.

3. Custody. You understand that, although the certificates representing the Restricted Shares shall be registered in your name, all such certificates (other than for Restricted Shares that have vested) shall be deposited, together with the stock power executed by you, in proper form for transfer, with the Company. Following the vesting of all Restricted Shares subject to this Agreement, the Company shall issue an appropriate certificate for those Restricted Shares that have become vested in accordance with paragraph 5.

4. Nontransferability of Restricted Shares. Until such time as the Restricted Shares become vested in accordance with the terms of this Agreement, you shall not have any right to sell, transfer, pledge, hypothecate, or otherwise dispose of the Restricted Shares. By signing this Agreement, you represent and warrant to the Company that you shall not sell, transfer, pledge, hypothecate, or otherwise dispose of the Restricted Shares in violation of applicable securities laws or the provisions of this Agreement. Any purported transfer, encumbrance or other disposition of the Restricted Shares that is in violation of this paragraph will be null and void, and the other party to any such purported transaction will not obtain any rights to or interest in the Restricted Shares covered. When and as permitted by the Plan, the Company may waive the restrictions set forth in this paragraph with respect to all or any portion of the Restricted Shares covered by this Agreement.

5. Vesting. Except as otherwise provided in this Agreement, your interest in the Restricted Shares shall vest and become non-forfeitable one year after the date of grant.

1 of 6

6. Change in Control. Upon the occurrence of a Change in Control (as defined in the Plan), the Committee may accelerate the vesting of outstanding, unvested Restricted Shares, in whole or in part, as determined by the Committee in its sole discretion.

7. Voting and Other Rights. You shall have all of the rights and status as a stockholder of the Company with respect to the Restricted Shares, including the right to vote any and all Restricted Shares and to receive dividends or other distributions thereon, regardless of whether such Restricted Shares are vested, until the earlier of the date on which such Restricted Shares are forfeited as provided herein or the date on which you cease to own such shares. Any additional Common Stock that you may become entitled to receive pursuant to a share dividend or a merger or reorganization in which the Company is the surviving Company or any other change in the capital structure of the Company will be subject to the same restrictions as Restricted Shares. You understand that the grant of Restricted Shares under this Agreement does not confer upon you any right to continue in your relationship as a director of the Company.

8. Adjustments for Changes in Capitalization of the Company. In the event of any change in the outstanding shares of Common Stock of the Company prior to the lapsing of the restrictions associated with the Restricted Shares by reason of any reorganization, recapitalization, stock split, stock dividend, combination or exchange of shares, merger, consolidation, or any change in the corporate structure of the Company or in the shares of Common Stock, the number and class of the Restricted Shares shall be appropriately adjusted by the Company, in its sole discretion, whose determination shall be conclusive.

9. Securities Laws. By signing this Agreement, you acknowledge and understand that applicable securities laws may restrict your right to dispose of any Restricted Shares that you may acquire hereunder and govern the manner in which such Restricted Shares may be sold. In addition, you acknowledge that at the time of delivery of the Restricted Shares issued hereunder, any subsequent sale of such Restricted Shares by you or for your account may not be covered by an effective registration statement under the Securities Act of 1933, as amended (the “Act”) and you shall not offer, sell or otherwise dispose of any of the Restricted Shares in any manner that would (i) require the Company to file any registration statement with the Securities Exchange Commission (“SEC”), (ii) require the Company to amend or supplement any registration statement that it may at any time have on file with the SEC, or (iii) violate the Act or any other state or federal law.

10. Withholding Taxes. If the grant or other transfer of the Restricted Shares, or the vesting of the Restricted Shares, results in taxable compensation income, you agree to furnishes the Company with, or otherwise makes provision for, sufficient funds to satisfy the Company’s tax withholding obligations and the Company’s obligation to deliver a certificate representing the Restricted Shares shall be subject to receipt of such payment or to such other arraignment acceptable to the Company of alternative means of satisfying applicable Federal, state and local withholding taxes. If you fail to make satisfactory arrangements for the payment of any required tax withholding obligations hereunder within the time frame set by the Committee, you will permanently forfeit such Restricted Shares.

11. Incorporation of Plan. These Restricted Shares are granted in accordance with and are subject to and conditioned upon all of the terms and conditions of the Plan (a copy of

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which in its present form has been provided to you), as from time to time amended, provided, however, that no future amendment or termination of the Plan shall, without your consent, alter or impair any of your rights or obligations with respect to the Restricted Shares. Reference is made to the terms and conditions of the Plan, all of which are incorporated by reference in this Agreement as if fully set forth herein. By accepting this Agreement, you expressly warrants that you have received, read and understood the Plan.

12. Integration. This Agreement supersedes any and all prior and/or contemporaneous agreements, either oral or in writing, between the parties hereto, with respect to the subject matter hereof. Each party to this Agreement acknowledges that no representations, inducements, promises, or other agreements, oral or otherwise, have been made by any party, or anyone acting on behalf of any party, pertaining to the subject matter hereof, which are not embodied herein, and that no prior and/or contemporaneous agreement, statement or promise pertaining to the subject matter hereof that is not contained in this Agreement shall be valid or binding on either party.

13. Successors. This Agreement shall be binding upon and inure to the benefit of any successor of the Company and your successors, assigns or estate, including your executors, administrators and trustees.

14. Amendment. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is in writing and signed by the party against whom such modification, waiver or discharge is sought to be enforced.

15. Address for Notices. Any notice to be given to the Company under the terms of this Agreement will be addressed to the Company, in care of its Secretary, at SL Industries, Inc., 520 Fellowship Road, Suite A114, Mt. Laurel, NJ 08054, or at such other address as the Company may hereafter designate in writing.

16. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to Restricted Shares awarded under the Plan or future Restricted Shares that may be awarded under the Plan, including evidence of ownership of the Restricted Shares, by electronic means or request your consent to participate in the Plan by electronic means. You hereby consents to receive such items by electronic delivery and agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company or another third party designated by the Company.

17. Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

18. Severability. In the event that any provision in this Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.

19. Governing Law. You expressly warrants that you not accepting this Agreement or the Restricted Shares in reliance on any promises, representations, or inducements other than those contained or specifically addressed herein. This Agreement will be governed by the laws of the State of New Jersey applicable to contracts made and to be performed therein, without giving effect to the conflict of law principles.

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20. Binding Agreement. By signing below, you and the Company agree to be bound by the terms and conditions of this Agreement.

[Signature page follows]

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By your signature and the signature of the Company’s representative below, you and the Company agree that the Restricted Shares are granted under and governed by this Grant Agreement and the Plan.

Very truly yours,
SL INDUSTRIES, INC.
By:
	Name:
	Title:

AGREED TO AND ACCEPTED

Signature

Print Name

[Signature Page to Restricted Share Agreement]

STOCK POWER

For Value Received, the undersigned hereby transfers to SL Industries, Inc., a New Jersey corporation, (“Company”), Three Thousand (3,000) shares of the Company’s common stock (“Restricted Shares”) standing in the name of the undersigned on the Company’s books and represented by stock certificate number                      herewith, pursuant to the Restricted Stock Agreement between the undersigned and the Company, dated May 9, 2013, and the undersigned does hereby irrevocably constitute and appoint the Company’s duly authorized officers as attorney-in-fact to transfer said Restricted Shares on the Company’s books with full power of substitution in the premises.

Dated:             , 20

(Printed Name)

(Signature)

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, William T. Fejes, certify that:

1. I have reviewed this quarterly report on Form 10-Q of SL Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 01, 2013

By:	/s/ William T. Fejes
	Name:	William T. Fejes
	Title:	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Louis J. Belardi, certify that:

1. I have reviewed this quarterly report on Form 10-Q of SL Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 01, 2013

By:	/s/ Louis J. Belardi
	Name:	Louis J. Belardi
	Title:	Chief Financial Officer, Treasurer and Secretary

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. §1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of SL Industries, Inc., (the “Company”) on Form 10-Q for the period ended June 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William T. Fejes, the Chief Executive Officer of the Company, and I, Louis J. Belardi, the Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 01, 2013	/s/ William T. Fejes
	Name:	William T. Fejes
	Title:	President and Chief Executive Officer
August 01, 2013	/s/ Louis J. Belardi
	Name:	Louis J. Belardi
	Title:	Chief Financial Officer, Treasurer and Secretary

This certification accompanies each Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Other Long - Term Liabilities

6 Months Ended

Jun. 30, 2013

Other Liabilities Disclosure [Abstract]

Other Long - Term Liabilities

11. Other Long - Term Liabilities

Other long-term liabilities consist of the following:

	June 30, 2013		December 31, 2012
	(in thousands)
Environmental	$	17,200	$	19,033
Unrecognized tax benefits, interest and penalties		792		657
Long-term incentive plan		255		220
Acquisition earn-out, long-term		37		57
Other long-term liabilities	$	18,284	$	19,967

XML

Debt - Schedule of Debt (Detail) (USD $)	Jun. 30, 2013
Line of Credit Facility [Line Items]
Less: current portion	$ (2,490,000)
2012 Credit Facility [Member]
Line of Credit Facility [Line Items]
$40 million variable interest rate revolving credit facility maturing in 2016	2,490,000
Total debt	2,490,000
Less: current portion	(2,490,000)
Total long-term debt

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CONSOLIDATED STATEMENTS OF INCOME (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
Net sales	$ 49,786,000	$ 48,899,000	$ 98,881,000	$ 98,239,000
Cost and expenses:
Cost of products sold	32,764,000	32,756,000	64,963,000	66,527,000
Engineering and product development	3,672,000	2,954,000	7,175,000	5,975,000
Selling, general and administrative	9,104,000	10,137,000	17,911,000	19,648,000
Depreciation and amortization	615,000	707,000	1,215,000	1,372,000
Total cost and expenses	46,155,000	46,554,000	91,264,000	93,522,000
Income from operations	3,631,000	2,345,000	7,617,000	4,717,000
Other income (expense):
Amortization of deferred financing costs	(20,000)	(39,000)	(39,000)	(72,000)
Interest income	2,000	2,000	3,000	3,000
Interest expense	(15,000)	(9,000)	(50,000)	(31,000)
Other gain (loss), net	(301,000)	(162,000)	(327,000)	(170,000)
Income from continuing operations before income taxes	3,297,000	2,137,000	7,204,000	4,447,000
Income tax provision	1,045,000	727,000	1,968,000	1,593,000
Income from continuing operations	2,252,000	1,410,000	5,236,000	2,854,000
(Loss) from discontinued operations, net of tax	(237,000)	(244,000)	(455,000)	(438,000)
Net income	$ 2,015,000	$ 1,166,000	$ 4,781,000	$ 2,416,000
Basic net income (loss) per common share
Income from continuing operations	$ 0.54	$ 0.32	$ 1.26	$ 0.64
(Loss) from discontinued operations, net of tax	$ (0.06)	$ (0.06)	$ (0.11)	$ (0.10)
Net income	$ 0.48	$ 0.26	$ 1.15	$ 0.54
Diluted net income (loss) per common share
Income from continuing operations	$ 0.54	$ 0.32	$ 1.25	$ 0.63
(Loss) from discontinued operations, net of tax	$ (0.06)	$ (0.06)	$ (0.11)	$ (0.10)
Net income	$ 0.48	$ 0.26	$ 1.14	$ 0.53
Shares used in computing basic net income (loss) per common share	4,157,000	4,444,000	4,148,000	4,501,000
Shares used in computing diluted net income (loss) per common share	4,204,000	4,457,000	4,189,000	4,518,000

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Income Per Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Income Per Share

4. Income Per Share

The Company has presented net income per common share pursuant to Accounting Standards Codification (“ASC”) 260 “Earnings Per Share.” Basic net income per common share is computed by dividing reported net income available to common shareholders by the weighted average number of shares outstanding for the period.

Diluted net income per common share is computed by dividing reported net income available to common shareholders by the weighted average shares outstanding for the period, adjusted for the dilutive effect of common stock equivalents, which consist of stock options, using the treasury stock method.

The table below sets forth the computation of basic and diluted net income per share:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands, except per share amounts)
Basic net income available to common shareholders:
Net income available to common shareholders from continuing operations	$	2,252		$	1,410		$	5,236		$	2,854
Diluted net income available to common shareholders from continuing operations	$	2,252		$	1,410		$	5,236		$	2,854
Shares:
Basic weighted average number of common shares outstanding		4,157			4,444			4,148			4,501
Common shares assumed upon exercise of stock options		47			13			41			17
Diluted weighted average number of common shares outstanding		4,204			4,457			4,189			4,518
Basic net income (loss) per common share:
Income from continuing operations	$	0.54		$	0.32		$	1.26		$	0.64
(Loss) from discontinued operations (net of tax)		(0.06	)		(0.06	)		(0.11	)		(0.10	)
Net income	$	0.48		$	0.26		$	1.15		$	0.54
Diluted net income (loss) per common share:
Income from continuing operations	$	0.54		$	0.32		$	1.25		$	0.63
(Loss) from discontinued operations (net of tax)		(0.06	)		(0.06	)		(0.11	)		(0.10	)
Net income	$	0.48		$	0.26		$	1.14		$	0.53

For the three and six months ended June 30, 2013, no stock options were excluded from the dilutive computation because the option exercise prices were not greater than the average market price of the Company’s common stock.

For the three and six months ended June 30, 2012, 7,000 and 6,000 stock options were excluded from the dilutive computation, respectively, because the option exercise prices were greater than the average market price of the Company’s common stock.

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Foreign Operations

6 Months Ended

Jun. 30, 2013

Text Block [Abstract]

Foreign Operations

18. Foreign Operations

As a result of a work stoppage at the Company’s Xianghe manufacturing facilities from March 7, 2013 through March 20, 2013, revenues for the quarter ended March 31, 2013 were adversely impacted by approximately $900,000. The Company realized those sales during the second quarter of 2013. Additionally, certain incremental costs were incurred during the six months ended June 30, 2013 related to the work stoppage, including employee, travel, consulting and legal costs of $535,000.

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Derivative Instruments and Hedging Activities - Additional Information (Detail) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Derivative Instruments And Hedging Activities Disclosure [Abstract]
Fair value of the foreign currency forward contracts, asset		$ 243,000
Fair value of the foreign currency forward contracts, liability	$ 84,000

XML

Accrued Liabilities - Other - Accrued Liabilities - Other (Detail) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Payables And Accruals [Abstract]
Taxes (other than income) and insurance	$ 500,000	$ 602,000
Commissions	637,000	680,000
Litigation and legal fees	119,000	138,000
Other professional fees	374,000	418,000
Environmental	5,051,000	5,334,000
Warranty	1,380,000	1,102,000
Deferred revenue	76,000	56,000
Acquisition earn-out, current	121,000	164,000
Other	2,413,000	2,092,000
Accrued liabilities - other	$ 10,671,000	$ 10,586,000

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

The Company is involved in certain legal and regulatory actions. Management believes that the ultimate resolution of such matters is unlikely to have a material adverse effect on the Company’s financial condition or results of operations, except as described below.

Litigation: The Company has been and is the subject of administrative actions that arise from its ownership of SL Surface Technologies, Inc. (“SurfTech”), a wholly-owned subsidiary, the assets of which were sold in November 2003. SurfTech formerly operated chrome-plating facilities in Pennsauken Township, New Jersey (the “Pennsauken Site”) and Camden, New Jersey (the “Camden Site”).

In 2006 the United States Environmental Protection Agency (the “EPA”) named the Company as a potential responsible party (a “PRP”) in connection with the remediation of the Puchack Well Field, which has been designated as a Superfund Site. The EPA has alleged that hazardous substances generated at the Company’s Pennsauken Site contaminated the Puchack Well Field. As a PRP, the Company is potentially liable, jointly and severally, for the investigation and remediation of the Puchack Well Field Superfund Site under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”).

The EPA is remediating the Puchack Well Field Superfund Site in two separate operable units. The first operable unit (“OU-1”) consists of an area of chromium groundwater contamination in three aquifers that exceeds the selected cleanup standard. The second operable unit (“OU-2”) pertains to sites that are allegedly the sources of contamination for the first operable unit. The EPA advised the Company in October 2010 that OU-2 includes soil contamination in the immediate vicinity of the Company’s Pennsauken Site.

In June 2011, the EPA announced a proposed plan for “cleaning up the soil” at OU-2. The remedy proposed by the EPA is “Geochemical Fixation.” This remedy involves applying a chemical reductant to the contaminated soil to reduce hexavalent chromium by converting it to immobilized trivalent chromium. The EPA’s estimated cost for this remedy is $20,700,000 over seven years. On September 26, 2011 the EPA issued a Record of Decision (“ROD”) selecting the Geochemical Fixation remedy.

The Company has reached an agreement with both the DOJ and EPA related to its liability for both OU-1 and OU-2 and has entered into a Consent Decree which governs the agreement, the terms of which are described below. The Company has agreed to perform the remediation for OU-2. Also, the Company has agreed to pay a fixed sum for the EPA’s past cost for OU-2 and a portion of the EPA’s past cost for OU-1. The payments are to be made in five equal payments of $2,141,000, for a total $10,705,000, plus interest. The Company has also agreed to pay the EPA’s costs for oversight of the OU-2 remediation. The United States District Court judge signed the Consent Decree effective April 30, 2013, thereby triggering the Company’s obligation under the Consent Decree. On May 10, 2013 the Company made the first payment related to its obligation under the Consent Decree in the amount of $2,185,000, which included interest. The next four payments will be made on the anniversary of the first payment plus ten days in the same amount of $2,141,000, plus interest. On May 28, 2013, a letter of credit in the amount of $8,564,000 was issued in favor of the EPA to provide financial assurance related to the Company’s remaining obligation to pay for the EPA’s past cost as mentioned above. Also, on July 19, 2013 the Company obtained financial assurance as required by the terms of the Consent Decree.

On December 3, 2012, the Company received a demand letter from the State of New Jersey. The demand is for $1,300,000 for past and future cleanup costs and $500,000 for natural resource damages (“NRD”) for a total of $1,800,000 (the “New Jersey Claim”). Although the Company and its counsel believe that it has meritorious defenses to any claim for reimbursement, the Company has offered to pay $250,000 to fully resolve the claim presented by the State of New Jersey for past costs, future costs and NRD at the Puchack Well Field Superfund site. The State of New Jersey is evaluating the Company’s counter-offer. Based on the current available information, the Company has estimated a total combined potential liability for OU-1 and OU-2 and the New Jersey Claim to be in the range of $18,169,000 to $29,550,000 The Company has recorded an accrual of $18,169,000 related to its combined liability related to this site. The estimated OU-2 remediation liability is based upon the EPA’s plan for remediation as provided in the ROD for OU-2 and the evaluation of data by the Company’s environmental engineering consultants. The liability for OU-1 and OU-2 is based upon the current terms of the Consent Decree.

Other

During 2012, the Company conducted an investigation to determine whether certain employees of SL Xianghe Power Electronics Corporation, SL Shanghai Power Electronics Corporation and SL Shanghai International Trading Corporation, three of the Company’s indirect wholly-owned subsidiaries incorporated and operating exclusively in China, may have improperly provided gifts and entertainment to government officials (the “China Investigation”). Based upon the China Investigation, which we believe is substantially complete, the estimated amounts of such gifts and entertainment was not material to the Company’s financial statements. Such estimate does not take into account the costs to the Company of the China Investigation itself, or any other additional costs.

The China Investigation included determining whether there were any violations of laws, including the U.S. Foreign Corrupt Practices Act (“FCPA”). The Company’s outside counsel has contacted the DOJ and the Securities and Exchange Commission (the “SEC”) voluntarily to disclose that the Company was conducting an internal investigation, and agreed to cooperate fully and update the DOJ and SEC periodically on further developments. The Company’s counsel has done so, and the Company has continued to cooperate fully with the DOJ and the SEC on the results of the China Investigation and various remediation actions undertaken by the Company.

The Company had retained outside counsel and forensic accountants to assist in the China Investigation. Additionally, the Company hired outside consultants to provide assistance in implementing a mandatory FCPA compliance program for all of its employees which was completed in December 2012. Also, during the first and second quarters of 2013 the Company engaged outside consultants to perform FCPA compliance tests at its operations in China and Mexico. The Company cannot predict at this time whether any regulatory action may be taken or any other adverse consequences may result from this matter.

In the ordinary course of its business the Company is and may be subject to other loss contingencies pursuant to foreign and domestic federal, state and local governmental laws and regulations and may be party to certain legal actions, frequently involving complaints by terminated employees and disputes with customers, suppliers and others. In the opinion of management, any such other loss contingencies are not expected to have a material adverse effect on the financial condition or results of operations of the Company.

Environmental Matters: Loss contingencies include potential obligations to investigate and eliminate or mitigate the effects on the environment of the disposal or release of certain chemical substances at various sites, such as Superfund sites and other facilities, whether or not they are currently in operation. The Company is currently participating in environmental assessments and cleanups at a number of sites and in the future may be involved in additional environmental assessments and cleanups. Based upon investigations completed to date by the Company and its independent engineering-consulting firms, management has provided an estimated accrual for all known costs believed to be probable and costs that can be reasonably estimated in the amount of $22,251,000, of which $17,200,000 is included as other long-term liabilities, with the remainder recorded as other short-term accrued liabilities, as of June 30, 2013. However, it is the nature of environmental contingencies that other circumstances might arise, the costs of which are indeterminable at this time due to such factors as changing government regulations and stricter standards, the unknown magnitude of cleanup costs, the unknown timing and extent of the remedial actions that may be required, the determination of the Company’s liability in proportion to other responsible parties, the divisibility of costs. These other circumstances could result in additional expenses or judgments, or offsets thereto. The adverse resolution of any one or more of these other circumstances could have a material adverse effect on the business, operating results, financial condition or cash flows of the Company. The Company’s environmental costs primarily relate to discontinued operations and such costs have been recorded in discontinued operations, net of tax.

There are three sites on which the Company may incur material environmental costs in the future as a result of past activities of its former subsidiary, SurfTech. There are two Company owned sites related to its former subsidiary, SurfTech. These sites are located in Pennsauken, New Jersey (the “Pennsauken Site”) and in Camden, New Jersey (the “Camden Site”). There is also a third site, which is not owned by the Company, referred to as the “Puchack Well Field Site.” The Puchack Well Field Site and the Pennsauken Site are part of the Puchack Well Field Superfund Site.

With respect to the Camden Site, the Company has reported soil contamination and a groundwater contamination plume emanating from the site. The New Jersey Department of Environmental Protection (“NJDEP”) approved, and the Company implemented in 2010, an interim remedial action pilot study to inject neutralizing chemicals into the unsaturated soil. Based on an assessment of post-injection data, our consultants believe the pilot study can be implemented as a full scale soil remedy to treat unsaturated contaminated soil. A Remedial Action Workplan for soils (“RAWP”) is being developed. The RAWP will select the injection remedy as the site wide remedy for unsaturated soils, along with demolition and proper disposal of the former concrete building slab and targeted excavation and disposal of impacted soil immediately underlying the slab. Additionally, the RAWP will address a small area of impacted soil off the property. The RAWP will be submitted to the NJDEP, by the Licensed Site Remediation Professional (“LSRP”) for the site. The RAWP is scheduled to be implemented in 2014. Also, the Company’s environmental consultants finalized an interim remedial action pilot study to treat on-site contaminated groundwater, consisting of injecting food-grade product, into the groundwater at the down gradient property boundary, to create a “bio-barrier.” The pilot study includes post-injection monitoring to assess the bio-barrier’s ability to treat contaminated groundwater. Implementation of the groundwater pilot study is currently underway with post-injection effectiveness monitoring expected to occur in 2014.

As previously reported, the Company is currently participating in environmental assessments and cleanups at a number of sites. One of these sites is a commercial facility, located in Wayne, New Jersey. Contaminated soil and groundwater has undergone remediation with NJDEP oversight, but contaminants of concern (“COCs”) in groundwater and surface water, which extend off-site, still remain above applicable NJDEP remediation standards. Certain COCs have also been detected in the indoor air of two commercial buildings, located on the property. One of the buildings (the “Main Building”) was outfitted with a sub-slab depressurization system as a mitigation measure. The source investigations under the Main Building were completed in June 2012. Soil and groundwater samples collected from underneath the Main Building identified COCs in excess of the NJDEP’s applicable remediation standards. Consequently, a soil contaminant source remains under the Main Building that is feeding the groundwater contamination. The remedial investigation conducted in the second quarter of 2012 identified a new soil source of COCs. A soil remedial action plan will be required in order to remove the new soil source contamination by a second building that continues to impact groundwater. Our consultants have reviewed data to determine what supplemental remedial action is necessary for soils, and whether to modify or expand the groundwater remedy that will likely consist of additional in-situ injections of food grade product into the groundwater. Estimates have been developed by the Company’s consultants, which includes costs to enhance the existing vapor intrusion system, remedial injections, soil excavation and additional tests and remedial activities. Costs related to this site are recorded as part of discontinued operations, net of tax.

The Company has reported soil and groundwater contamination at the facility of SL-MTI located on its property in Montevideo, Minnesota. An analysis of the contamination has been completed and a remediation plan has been implemented at the site pursuant to the remedial action plan approved by the Minnesota Pollution Control Agency. The remaining steps under this plan are the monitoring of samples. Costs related to this site are recorded as a component of continuing operations.

As of June 30, 2013 and December 31, 2012, environmental accruals of $22,251,000 and $24,367,000, respectively, have been recorded by the Company in accrued liabilities – other and in other long-term liabilities, as appropriate (see Notes 10 and 11 for additional information).

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Goodwill And Intangible Assets - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended		1 Months Ended	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012	Feb. 27, 2012	Feb. 27, 2012 Customer relationships [Member]	Dec. 31, 2012 Customer relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Purchase price for assets purchased						$ 1,050,000
Amount of earn-out liability					294,000	294,000
SLMTI recorded acquisition costs				422,000	434,000
Purchase price allocated to inventories					670,000
Purchase price allocated to equipment					202,000
Purchase price allocated to other current assets					10,000
Purchase price allocated to other intangible assets							168,000	168,000
Estimated useful lives of intangible assets acquired							5 years	5 years
Earn-out Liability	158,000		158,000		221,000
Payments related to earn-out			88,000
Amortization expense for intangible assets	113,000	206,000	224,000	401,000
Amortization expense for software	$ 37,000	$ 41,000	$ 73,000	$ 79,000

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Accrued Liabilities - Other - Summary of Activity in Accrued Warranty and Service Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Payables And Accruals [Abstract]
Liability, beginning of year	$ 1,102
Expense for new warranties issued	683
Warranty claims	(405)
Liability, end of period	$ 1,380

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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Notional Values of Company's Derivative Financial Instruments

The following table summarizes the notional values of the Company’s derivative financial instruments as of June 30, 2013.

Product	Number of Instruments		Notional
			(in thousands)
Mexican Peso (MXN) Forward Contracts		18	MXN	70,147
Chinese Yuan (CNH) Forward Contracts		9	CNH	49,750

Gain or Loss Recognized on Foreign Currency Forward Contracts

The following table details the location in the financial statements of the gain or loss recognized on foreign currency forward contracts that are marked to market for the three and six months ended June 30, 2013 and June 30, 2012:

		Three Months Ended June 30, 2013				Three Months Ended June 30, 2012
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in  Income on Derivative	Amount of Gain (Loss)  Recognized in Income on Derivative			Location of Gain (Loss) Recognized in  Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative
		(in thousands)				(in thousands)
Foreign Exchange Contracts	Other gain (loss), net	$	(301	)	Other gain (loss), net	$	(162	)

		Six Months Ended June 30, 2013				Six Months Ended June 30, 2013
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in  Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative			Location of Gain (Loss) Recognized in  Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative
		(in thousands)				(in thousands)
Foreign Exchange Contracts	Other gain (loss), net	$	(327	)	Other gain (loss), net	$	(170	)

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation. Operating results for interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. These financial statements should be read in conjunction with the Company’s audited financial statements and notes thereon included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. Unless the context requires otherwise, the terms the “Company,” “SL Industries,” “we,” “us” and “our” mean SL Industries, Inc., a Delaware corporation, and its consolidated subsidiaries after Reincorporation (defined and described below) and SL Industries, Inc., a New Jersey corporation prior to Reincorporation. In the context of describing the Reincorporation, “SL-NJ” means SL Industries, Inc., a New Jersey corporation, and “SL-DE” means SL Industries, Inc., a Delaware corporation and wholly owned subsidiary of SL-NJ.

On May 9, 2013, the Company’s shareholders voted to approve a proposal to change the state of incorporation of SL Industries from the State of New Jersey to the State of Delaware by merging SL-NJ with and into SL-DE (the “Reincorporation”). On June 20, 2013 (the “Effective Date”), the Reincorporation was effected by merging SL-NJ with and into SL-DE pursuant to an Agreement and Plan of Merger, dated June 3, 2012, between SL-NJ and SL-DE. SL-DE survived the merger and SL-NJ ceased to exist. The principal reason for the Reincorporation was to give the Company a greater measure of flexibility and simplicity in corporate governance and provide greater clarity and predictability with respect to the Company’s corporate legal affairs. The Reincorporation did not result in any change in the name, business, management, fiscal year, accounting, location of the principal executive officers, assets or liabilities or net worth (other than the costs of reincorporation which were immaterial) of the Company.

Income Per Share

The Company has presented net income per common share pursuant to Accounting Standards Codification (“ASC”) 260 “Earnings Per Share.” Basic net income per common share is computed by dividing reported net income available to common shareholders by the weighted average number of shares outstanding for the period.

Income Taxes - Interim Reporting

The Company calculates its interim tax provision in accordance with the provisions of ASC 740-270 “Income Taxes – Interim Reporting.” For each interim period the Company estimates its annual effective income tax rate and applies the estimated rate to its year-to-date income or loss before income taxes. The Company also computes the tax provision or benefit related to items separately reported, such as discontinued operations, and recognizes the items net of their related tax effect in the interim periods in which they occur. The Company also recognizes the effect of changes in enacted tax laws or rates in the interim periods in which the changes occur.

Recently Adopted and Issued Accounting Pronouncements

In July 2012, the FASB issued ASU 2012-02 “Intangibles-Goodwill and Other: Testing Indefinite-Lived Intangible Assets for Impairment,” which amends the guidance on impairment testing for indefinite-lived intangible assets. The amended guidance will allow companies to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. A company no longer will be required to test the fair value of an intangible asset unless the company determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. ASU 2012-02 is effective for interim and annual periods beginning after September 15, 2012. The implementation of this guidance did not have a material impact on the Company’s consolidated financial statements.

In October 1, 2012, the FASB issued ASU 2012-04 “Technical Corrections and Improvements,” which makes certain technical corrections and improvements and conforming amendments related to fair value measurements. The amendments represent changes to clarify, correct unintended application of, or make minor improvements to the FASB Accounting Standards Codification that are not expected to have a significant effect on current accounting practice. ASU 2012-04 is effective for fiscal periods beginning after December 15, 2012. The implementation of this guidance did not have a material impact on the Company’s consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, “Comprehensive Income (Topic 220) – Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income,” which requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety in the same reporting period. ASU 2013-02 is effective for fiscal periods beginning after December 15, 2012. The implementation of this guidance did not have a material impact on the Company’s consolidated financial statements.

In March 2013, the FASB issued ASU No. 2013-05, “Foreign Currency Matter (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity a consensus of the FASB Emerging Issues Task Force,” which permits an entity to release cumulative translation adjustments into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided, or, if a controlling financial interest is no longer held. ASU 2013-05 is effective for fiscal periods beginning after December 15, 2013. The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force),” which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. ASU 2013-11 is effective for fiscal periods beginning after December 15, 2013. The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

Segment Information

The Company currently operates under four business segments: SL Power Electronics Corp. (“SLPE”), the High Power Group, SL-MTI and RFL Electronics Inc. (“RFL”). Teal Electronics Corp. (“TEAL”) and MTE Corporation (“MTE”) are combined into one business segment, which is reported as the High Power Group. The Company aggregates operating business subsidiaries into a single segment for financial reporting purposes if aggregation is consistent with the objectives of ASC 280 “Segment Reporting.” Business units are also combined if they have similar characteristics in each of the following areas:

• nature of products and services

• nature of production process

• type or class of customer

• methods of distribution

Fair Value Measurement and Financial Instruments

ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. FASB ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.

ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, FASB ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Currently, the Company uses foreign currency forward contracts to hedge its foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including spot rates and market forward points. The fair value of the foreign currency forward contracts is based on interest differentials between the currencies being traded, spot rates and market forward points.

To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees, where applicable.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of June 30, 2013, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

In conjunction with its implementation of updates to the fair value measurements guidance, the Company made an accounting policy election to measure derivative financial instruments subject to master netting agreements on a net basis.

Derivative Instruments and Hedging Activities

ASC Topic 815, as amended and interpreted, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. As required by ASC Topic 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to variability in expected future cash flows related to forecasted foreign exchange-based risk are considered economic hedges of the Company’s forecasted cash flows.

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Related Party Transactions

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

20. Related Party Transactions

On May 1, 2013, the Company entered into a Management Services Agreement (“Management Services Agreement”) with SP Corporate Services LLC (“SP Corporate”). SP Corporate is an affiliate of SPH Group Holdings LLC (“SPHG”). A member of the Company’s Board of Directors, Warren G. Lichtenstein, is affiliated with SPHG. Also, the Company’s Chairman of the Board, Glen M. Kassan is affiliated with SPHG. Pursuant to the Management Services Agreement, SP Corporate agreed to provide, at the direction of the Company’s Chief Executive Officer, non-exclusive services to support the Company’s growth strategy, business development, planning, execution assistance and related support services. The monthly fee for these services is $10,400 paid in advance. The Management Services Agreement has a term of one year and has been approved by the Audit Committee of the Board of Directors and a majority of the disinterested directors of the Company.

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Stock-Based Compensation - Additional Information 2 (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Total intrinsic value of option exercised	$ 185,000	$ 0
Total unrecognized compensation cost related to stock options	34,000
Weighted-average period of total unrecognized compensation cost related to stock options	4 months 24 days
Cash received from option exercises	227,000
Tax benefit realized for tax deduction from option exercises of the share-based payment	70,000
Aggregate exercise price exercised by option holders - principal option plans	$ 227,000	$ 0

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Accrued Liabilities - Other (Tables)

6 Months Ended

Jun. 30, 2013

Text Block [Abstract]

Accrued Liabilities - Other

Accrued liabilities – other consist of the following:

	June 30, 2013		December 31, 2012
	(in thousands)
Taxes (other than income) and insurance	$	500	$	602
Commissions		637		680
Litigation and legal fees		119		138
Other professional fees		374		418
Environmental		5,051		5,334
Warranty		1,380		1,102
Deferred revenue		76		56
Acquisition earn-out, current		121		164
Other		2,413		2,092
Accrued liabilities - other	$	10,671	$	10,586

Summary of Activity in Accrued Warranty and Service Liabilities

The following is a summary of activity in accrued warranty and service liabilities:

	Six Months Ended June 30, 2013
	(in thousands)
Liability, beginning of year	$	1,102
Expense for new warranties issued		683
Warranty claims		(405	)
Liability, end of period	$	1,380

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Inventories - Inventories (Detail) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Inventory Disclosure [Abstract]
Raw materials	$ 17,510,000	$ 15,726,000
Work in process	5,989,000	4,623,000
Finished goods	4,143,000	4,819,000
Gross inventory	27,642,000	25,168,000
Less: allowances	(2,967,000)	(3,066,000)
Inventories, net	$ 24,675,000	$ 22,102,000

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Goodwill And Intangible Assets - Goodwill and Intangible Assets (Detail) (USD $)					1 Months Ended	12 Months Ended		6 Months Ended	12 Months Ended					6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Trademarks [Member]	Dec. 31, 2012 Trademarks [Member]	Feb. 27, 2012 Customer relationships [Member]	Dec. 31, 2012 Customer relationships [Member]	Jun. 30, 2013 Customer relationships [Member]	Jun. 30, 2013 Patents [Member]	Dec. 31, 2012 Patents [Member]	Jun. 30, 2013 Developed technology [Member]	Dec. 31, 2012 Developed technology [Member]	Jun. 30, 2013 Licensing fees [Member]	Dec. 31, 2012 Licensing fees [Member]	Jun. 30, 2013 Minimum [Member] Customer relationships [Member]	Jun. 30, 2013 Minimum [Member] Patents [Member]	Jun. 30, 2013 Minimum [Member] Developed technology [Member]	Jun. 30, 2013 Minimum [Member] Licensing fees [Member]	Jun. 30, 2013 Maximum [Member] Customer relationships [Member]	Jun. 30, 2013 Maximum [Member] Patents [Member]	Jun. 30, 2013 Maximum [Member] Developed technology [Member]	Jun. 30, 2013 Maximum [Member] Licensing fees [Member]
Other Intangibles [Line Items]
Finite lived intangible assets, Gross Value	$ 7,305,000	$ 7,303,000				$ 3,868,000	$ 3,868,000	$ 1,287,000	$ 1,285,000	$ 1,700,000	$ 1,700,000	$ 450,000	$ 450,000
Indefinite lived intangible assets, Gross Value			1,672,000	1,672,000
Other intangible assets, Gross	8,977,000	8,975,000
Finite lived intangible assets, Accumulated Amortization	6,527,000	6,305,000				3,078,000	3,257,000	1,203,000	1,187,000	1,700,000	1,700,000	367,000	340,000
Indefinite lived intangible assets, Accumulated Amortization
Finite lived intangible assets, Net Value	778,000	998,000				790,000	611,000	84,000	98,000			83,000	110,000
Indefinite lived intangible assets, Net Value			1,672,000	1,672,000
Other intangible assets, net	$ 2,450,000	$ 2,670,000
Amortizable Life					5 years	5 years		20 years	20 years					5 years	5 years	5 years	5 years	8 years	20 years	6 years	10 years

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Option Activity Under Principal Option Plans

Option activity under the principal option plans as of June 30, 2013 and changes during the six months ended June 30, 2013 were as follows:

	Outstanding Options			Weighted Average Exercise Price		Weighted Average Remaining Life		Aggregate Intrinsic Value
	(in thousands)					(in years)		(in thousands)
Outstanding as of December 31, 2012		135		$	12.79		4.33	$	670
Granted		—			—
Exercised		(18	)		12.65
Forfeited		—			—
Expired		—			—
Outstanding as of June 30, 2013		117		$	12.81		3.93	$	1,436
Exercisable as of June 30, 2013		102		$	12.57		3.88	$	1,276

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Retirement Plans and Deferred Compensation - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Costs incurred under defined contribution pension plan	$ 181,000	$ 232,000	$ 397,000	$ 433,000
Amount charged to expenses in connection with agreements for supplemental benefits plans	$ 90,000	$ 101,000	$ 132,000	$ 201,000
Minimum [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Discount rates for supplemental retirement benefits plans	6.00%
Maximum [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Discount rates for supplemental retirement benefits plans	12.00%

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Related Party Transactions - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013
Related Party Transactions [Abstract]
Management Services Agreement effective date	May 01, 2013
Management Services Agreement monthly fee	$ 10,400

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Segment Information - Net Intangible Assets by Segment (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Goodwill and other intangible assets, net
Goodwill and other intangible assets, net	$ 25,176	$ 25,405
Operating Segments [Member] | SLPE [Member]
Goodwill and other intangible assets, net
Goodwill and other intangible assets, net	4,541	4,563
Operating Segments [Member] | High Power Group [Member]
Goodwill and other intangible assets, net
Goodwill and other intangible assets, net	15,180	15,343
Operating Segments [Member] | SL-MTI [Member]
Goodwill and other intangible assets, net
Goodwill and other intangible assets, net	123	140
Operating Segments [Member] | RFL [Member]
Goodwill and other intangible assets, net
Goodwill and other intangible assets, net	$ 5,332	$ 5,359

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Stock-Based Compensation - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended			6 Months Ended			3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012	Jun. 30, 2013 2008 Incentive Stock Plan [Member]	May 14, 2008 2008 Incentive Stock Plan [Member]	Dec. 31, 2011 Incentive Stock Plan (2008 Plan) [Member]	Jun. 30, 2013 2011 Long Term Incentive Plan [Member] Restricted Stock Units (RSUs) [Member]	Jun. 30, 2013 2011 Long Term Incentive Plan [Member] Restricted Stock Units (RSUs) [Member]	Dec. 31, 2011 2011 Long Term Incentive Plan [Member] Restricted Stock Units (RSUs) [Member] Y
Stock Based Compensation [Line Items]
Stock-based compensation cost, gross	$ 210,000	$ 595,000	$ 332,000	$ 744,000					$ 32,000	$ 52,000
Stock-based compensation cost, net of tax	148,000	385,000	241,000	477,000
Common stock shares authorized in Plan							315,000	450,000
Options granted contractual term						10 years
Options outstanding	117,000		117,000		135,000	117,000
Shares available for grant						116,000
Restricted stock units vesting period for the 2011, 2012, and 2013 Long Term Incentive Plans											3
Grant date											Jun. 09, 2011
Weighted-average price of restricted stock											$ 23.00
Total unrecognized compensation cost related to restricted stock units									$ 48,000	$ 48,000
Maximum number of achievable RSUs									36,000	36,000

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Derivative Instruments and Hedging Activities - Gain or Loss Recognized on Foreign Currency Forward Contracts (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Gain or loss recognized on foreign currency forward contracts			$ (327,000)	$ (170,000)
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contracts [Member] | Other gain (loss), net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain or loss recognized on foreign currency forward contracts	$ (301,000)	$ (162,000)	$ (327,000)	$ (170,000)

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Shareholders' Equity

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Shareholders' Equity

19. Shareholders’ Equity

On November 16, 2010, the Board of Directors authorized a plan that allows for the repurchase up to an aggregate of 470,000 shares of the Company’s outstanding common stock (the “2010 Repurchase Plan”). Any repurchases pursuant to the 2010 Repurchase Plan would be made in the open market or in negotiated transactions. During the first six months of 2013, the Company purchased approximately 33,000 shares of Company stock at an average price of $23.79 a share. As a result, as of June 30, 2013, approximately 297,000 shares remained available for purchase under the 2010 Repurchase Plan.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
OPERATING ACTIVITIES:
Net income	$ 4,781,000	$ 2,416,000
Adjustment for losses from discontinued operations	455,000	438,000
Income from continuing operations	5,236,000	2,854,000
Adjustments to reconcile income from continuing operations to net cash (used in) provided by operating activities:
Depreciation	918,000	892,000
Amortization	297,000	480,000
Amortization of deferred financing costs	39,000	72,000
Stock-based compensation	332,000	744,000
Excess tax benefit on stock compensation	(35,000)
Loss on foreign exchange contracts	327,000	170,000
Provisions for losses on accounts receivable	34,000	40,000
Deferred compensation and supplemental retirement benefits	132,000	201,000
Deferred compensation and supplemental retirement benefit payments	(260,000)	(269,000)
Deferred income taxes	70,000	(293,000)
Loss on sale of equipment		11,000
Changes in operating assets and liabilities, excluding effects of business combinations:
Accounts receivable	(1,820,000)	3,297,000
Inventories	(2,507,000)	(503,000)
Other assets	(1,049,000)	(1,004,000)
Accounts payable	(1,045,000)	1,216,000
Other accrued liabilities	335,000	3,333,000
Accrued income taxes	(383,000)	10,000
Net cash provided by operating activities from continuing operations	621,000	11,251,000
Net cash (used in) operating activities from discontinued operations	(2,934,000)	(513,000)
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES	(2,313,000)	10,738,000
INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(1,801,000)	(879,000)
Acquisition of a business, net of cash acquired		(756,000)
Purchases of other assets	(62,000)	(155,000)
NET CASH (USED IN) INVESTING ACTIVITIES	(1,863,000)	(1,790,000)
FINANCING ACTIVITIES:
Proceeds from Senior Revolving Credit Facility	13,550,000
Payments of Senior Revolving Credit Facility	(11,060,000)
Proceeds from Revolving Credit Facility		3,900,000
Payments of Revolving Credit Facility		(3,900,000)
Payments of deferred financing costs	(30,000)	(43,000)
Repurchase and retirement of common stock		(4,177,000)
Treasury stock purchases	(792,000)	(2,468,000)
Proceeds from stock options exercised	227,000	0
Excess tax benefit on stock compensation	35,000
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	1,930,000	(6,688,000)
Effect of exchange rate changes on cash	24,000	(1,000)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(2,222,000)	2,259,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	3,196,000	5,632,000
CASH AND CASH EQUIVALENTS AT END OF PERIOD	974,000	7,891,000
Cash paid during the period for:
Interest	49,000	32,000
Income taxes	$ 2,445,000	$ 1,622,000

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Receivables

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

Receivables

2. Receivables

Receivables consist of the following:

	June 30, 2013			December 31, 2012
	(in thousands)
Trade receivables	$	29,907		$	29,284
Less: allowance for doubtful accounts		(625	)		(591	)
Trade receivables, net		29,282			28,693
Other		2,863			1,613
Receivables, net	$	32,145		$	30,306

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

5. Stock-Based Compensation

At June 30, 2013, the Company had stock-based employee compensation plans as described below. The total compensation expense (included in selling, general and administrative expense) related to these plans for the three and six months ended June 30, 2013 was $210,000 and $332,000 ($148,000 and $241,000, net of tax), respectively. For the three and six months ended June 30, 2012, the total compensation expense was $595,000 and $744,000 ($385,000 and $477,000, net of tax), respectively.

On May 14, 2008, the shareholders approved the 2008 Incentive Stock Plan (the “2008 Plan”). The 2008 Plan was proposed to create an additional incentive to retain directors, key employees and advisors of the Company. Prior to the amendment of the 2008 Plan on June 8, 2011, as described below, up to 315,000 shares of the Company’s common stock were subject to the 2008 Plan. Options granted under the 2008 Plan are required to stipulate an exercise price per share of not less than the fair market value of the Company’s common stock on the business day immediately prior to the date of the grant. Options granted under the 2008 Plan are exercisable no later than ten years after the grant date.

During 2011, the shareholders of the Company approved amendments to the 2008 Plan to: (a) increase the number of shares of the Company’s common stock subject to the 2008 Plan from 315,000 shares to 450,000 shares, and (b) require shareholder approval prior to the reduction of the exercise price of any outstanding options or stock appreciation rights, any repricing through cancellations and re-grants of new options or stock appreciation rights, or any cancellation of outstanding options or stock appreciation rights with an exercise price above the current stock price in exchange for cash or other securities. No stock options were granted to select executives and key employees under the 2008 Plan during the six months ended June 30, 2013. As of June 30, 2013, there were 117,000 options outstanding under the 2008 Plan. As of June 30, 2013, there were 116,000 shares available for grant under the 2008 Plan.

During the second quarter of 2011, the Company implemented a Long-Term Incentive Plan (the “2011 LTIP”) pursuant to the 2008 Plan which awarded restricted stock units (“RSUs”) to eligible executives. Under the terms of the 2011 LTIP, the number of RSUs that may vest, if any, will be based on, among other things, the Company achieving certain sales and return on invested capital (“ROIC”), as defined, targets during the January 2011 to December 2013 performance period. Earned RSUs, if any, cliff vest at the end of fiscal 2013 (100% of earned RSUs vest at December 31, 2013). The final value of these RSUs will be determined by the number of shares earned. The value of these RSUs is charged to compensation expense on a straight-line basis over the three year vesting period with periodic adjustments to account for changes in anticipated award amounts. The weighted-average price for these RSUs was $23.00 per share based on the grant date of June 9, 2011. During the three months ended and six months ended June 30, 2013, $32,000 and $52,000 was charged to compensation expense, respectively. As of June 30, 2013, total unamortized compensation expense for this grant was $48,000. As of June 30, 2013, the maximum number of achievable RSUs under the 2011 LTIP is 36,000 RSUs.

During the first quarter of 2012, the Company implemented a Long-Term Incentive Plan (the “2012 LTIP”) pursuant to the 2008 Plan which had similar conditions and vesting terms as the 2011 LTIP. The weighted-average price for these RSUs was $18.00 per share based on the grant date of February 17, 2012. During the three months ended and six months ended June 30, 2013, $19,000 and $29,000 was charged to compensation expense, respectively. As of June 30, 2013, total unamortized compensation expense for this grant was $84,000. As of June 30, 2013, the maximum number of achievable RSUs under the 2012 LTIP was 54,000 RSUs.

On April 2, 2012, the Company granted each Director, except the Chairman, 3,000 restricted shares pursuant to the 2008 Plan. The Chairman was granted 10,000 restricted shares pursuant to the 2008 Plan. The shares vest upon the earlier to occur of the first anniversary of the grant date or at the discretion of the Compensation Committee, upon the Director ending his continuous service as a director of the Company. Based on the terms of the awards the shares were immediately expensed and as a result the Company recognized $431,000 of stock compensation expense during the second quarter of 2012. The weighted-average price of these restricted stock grants was $19.57 per share based on the grant date of April 2, 2012. All shares vested and were granted under this award on April 2, 2013.

During the first quarter of 2013, the Company implemented a Long-Term Incentive Plan (the “2013 LTIP”) pursuant to the 2008 Plan which had similar conditions and vesting terms as the 2011 LTIP. The weighted-average price for these RSUs was $19.17 per share based on the grant date of March 5, 2013. During the three and six months ended June 30, 2013, $33,000 and $43,000 was charged to compensation expense, respectively. As of June 30, 2013, total unamortized compensation expense for this grant was $336,000. As of June 30, 2013, the maximum number of achievable RSUs under the 2013 LTIP was 28,000 RSUs.

On May 9, 2013, the Company granted each Director 3,000 restricted shares pursuant to the 2008 Plan. The shares vest upon the first anniversary of the grant date. Based on the terms of the awards the value of these restricted shares is charged to compensation expense on a straight-line basis over the one year vesting period. As a result, the Company recognized $45,000 of stock compensation expense during the second quarter of 2013. As of June 30, 2013, total unamortized compensation expense for this grant was $264,000. The weighted-average price of these restricted stock grants was $20.60 per share based on the grant date of May 9, 2013. As of June 30, 2013, no shares were granted under this award.

Stock Options

Option activity under the principal option plans as of June 30, 2013 and changes during the six months ended June 30, 2013 were as follows:

	Outstanding Options			Weighted Average Exercise Price		Weighted Average Remaining Life		Aggregate Intrinsic Value
	(in thousands)					(in years)		(in thousands)
Outstanding as of December 31, 2012		135		$	12.79		4.33	$	670
Granted		—			—
Exercised		(18	)		12.65
Forfeited		—			—
Expired		—			—
Outstanding as of June 30, 2013		117		$	12.81		3.93	$	1,436
Exercisable as of June 30, 2013		102		$	12.57		3.88	$	1,276

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the second quarter of fiscal 2013 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2013. This amount changes based on the fair market value of the Company’s stock. The total intrinsic value of options exercised for the six months ended June 30, 2013 was $185,000. No options were exercised during the six months ended June 30, 2012.

As of June 30, 2013, $34,000 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 0.4 years.

Tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options are classified as financing cash flows. Cash received from option exercises for the six months ended June 30, 2013 was $227,000. The actual tax benefit realized for the tax deduction from option exercises of share-based payment arrangements totaled $70,000 for the six months ended June 30, 2013. No options were exercised during the six months ended June 30, 2012. The Company has applied the “Short-cut” method in calculating the historical windfall tax benefits. All tax shortfalls will be applied against this windfall before being charged to earnings.

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Inventories

6 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

Inventories

3. Inventories

Inventories consist of the following:

	June 30, 2013			December 31, 2012
	(in thousands)
Raw materials	$	17,510		$	15,726
Work in process		5,989			4,623
Finished goods		4,143			4,819
Gross inventory		27,642			25,168
Less: allowances		(2,967	)		(3,066	)
Inventories, net	$	24,675		$	22,102

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Income Per Share - Computation of Basic and Diluted Net Income Per Share (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Basic net income available to common shareholders:
Net income available to common shareholders from continuing operations	$ 2,252,000	$ 1,410,000	$ 5,236,000	$ 2,854,000
Diluted net income available to common shareholders from continuing operations	$ 2,252,000	$ 1,410,000	$ 5,236,000	$ 2,854,000
Shares:
Basic weighted average number of common shares outstanding	4,157,000	4,444,000	4,148,000	4,501,000
Common shares assumed upon exercise of stock options	47,000	13,000	41,000	17,000
Diluted weighted average number of common shares outstanding	4,204,000	4,457,000	4,189,000	4,518,000
Basic net income (loss) per common share:
Income from continuing operations	$ 0.54	$ 0.32	$ 1.26	$ 0.64
(Loss) from discontinued operations (net of tax)	$ (0.06)	$ (0.06)	$ (0.11)	$ (0.10)
Net income	$ 0.48	$ 0.26	$ 1.15	$ 0.54
Diluted net income (loss) per common share:
Income from continuing operations	$ 0.54	$ 0.32	$ 1.25	$ 0.63
(Loss) from discontinued operations (net of tax)	$ (0.06)	$ (0.06)	$ (0.11)	$ (0.10)
Net income	$ 0.48	$ 0.26	$ 1.14	$ 0.53

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Receivables (Tables)

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

Receivables

Receivables consist of the following:

	June 30, 2013			December 31, 2012
	(in thousands)
Trade receivables	$	29,907		$	29,284
Less: allowance for doubtful accounts		(625	)		(591	)
Trade receivables, net		29,282			28,693
Other		2,863			1,613
Receivables, net	$	32,145		$	30,306

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Goodwill And Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill And Intangible Assets

Intangible assets consist of the following:

	Amortizable Life (years)	June 30, 2013						December 31, 2012
		Gross Value		Accumulated Amortization		Net Value		Gross Value		Accumulated Amortization		Net Value
		(in thousands)
Finite-lived intangible assets:
Customer relationships (1)	5 to 8	$	3,868	$	3,257	$	611	$	3,868	$	3,078	$	790
Patents (2)	5 to 20		1,287		1,203		84		1,285		1,187		98
Developed technology	5 to 6		1,700		1,700		—		1,700		1,700		—
Licensing fees	5 to 10		450		367		83		450		340		110
Total amortized finite-lived intangible assets			7,305		6,527		778		7,303		6,305		998
Indefinite-lived intangible assets:
Trademarks			1,672		—		1,672		1,672		—		1,672
Other intangible assets, net		$	8,977	$	6,527	$	2,450	$	8,975	$	6,305	$	2,670

⁽¹⁾  On February 27, 2012, the Company purchased certain assets of Astromec, a subsidiary of Pro-Dex. Included in the purchase price is a customer list valued at $168,000. The estimated useful life of the asset is 5 years.

⁽²⁾  During 2013 and 2012, the Company’s MTE division capitalized legal fees related to a new patent application. The estimated useful life of the asset is 20 years.

Amortization Expense for Intangible Assets Subject to Amortization

Estimated future amortization expense for intangible assets subject to amortization in each of the next five fiscal years is as follows:

	Amortization Expense
	(in thousands)
2013	$	440
2014	$	401
2015	$	58
2016	$	39
2017	$	14

Changes in Goodwill Balances by Segment

Changes in goodwill balances by segment (defined below) are as follows:

	Balance December 31, 2012		Translation Adjustment			Balance June 30, 2013
	(in thousands)
SL Power Electronics Corp.	$	4,242	$	(9	)	$	4,233
High Power Group:
MTE Corporation		8,189		—			8,189
Teal Electronics Corp.		5,055		—			5,055
RFL Electronics Inc.		5,249		—			5,249
Goodwill	$	22,735	$	(9	)	$	22,726

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Shareholders' Equity - Additional Information (Detail) (2010 Repurchase Plan [Member], USD $)	6 Months Ended
	Jun. 30, 2013	Nov. 16, 2010
2010 Repurchase Plan [Member]
Shareholders' Equity [Line Items]
Stock Repurchase Program, number of shares authorized to be repurchased		470,000
Repurchase of common stock number of shares purchased	33,000
Treasury stock acquired, average cost per share	$ 23.79
Stock Repurchase Program, remaining number of shares authorized to be repurchased	297,000

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Fair Value Measurement and Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2013 and December 31, 2012, aggregated by the level in the fair value hierarchy within which those measurements fall:

	Quoted Prices in  Active Markets for Identical Assets and Liabilities (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs  (Level 3)		Balance at June 30,     2013
	(in thousands)
Liabilities
Derivative financial instruments	$	—	$	84	$	—	$	84

	Quoted Prices in  Active Markets for Identical Assets and Liabilities (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs  (Level 3)		Balance at December  31, 2012
	(in thousands)
Assets
Derivative financial instruments	$	—	$	243	$	—	$	243

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Foreign Operations - Additional Information (Detail) (USD $)	3 Months Ended	6 Months Ended
	Mar. 31, 2013	Jun. 30, 2013
Foreign Operations [Line Items]
Initiation date of manufacturing work stoppage		Mar. 07, 2013
End date of manufacturing work stoppage		Mar. 20, 2013
Adverse impact of work stoppage on revenues	$ 900,000
Incremental costs of work stoppage		$ 535,000

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Debt - Additional Information (Detail) (USD $)	6 Months Ended			3 Months Ended			6 Months Ended		6 Months Ended
	Jun. 30, 2013 2012 Credit Facility [Member]	Mar. 11, 2013 2012 Credit Facility [Member]	Dec. 31, 2012 2012 Credit Facility [Member]	Aug. 31, 2012 2012 Credit Facility [Member] PNC Bank, National Association ("PNC") [Member]	Jun. 20, 2013 2012 Credit Facility [Member] PNC Bank, National Association ("PNC") [Member]	Aug. 09, 2012 2012 Credit Facility [Member] PNC Bank, National Association ("PNC") [Member]	Jun. 30, 2013 2012 Credit Facility [Member] Standby Letters of Credit Due May 28, 2014 [Member]	Aug. 09, 2012 2012 Credit Facility [Member] Letter of Credit [Member] PNC Bank, National Association ("PNC") [Member]	Jun. 30, 2013 Minimum [Member] London Interbank Offered Rate (LIBOR) [Member]	Jun. 30, 2013 Minimum [Member] Base Rate [Member]	Jun. 30, 2013 Maximum [Member]	Jun. 30, 2013 Maximum [Member] London Interbank Offered Rate (LIBOR) [Member]	Jun. 30, 2013 Maximum [Member] Base Rate [Member]	Mar. 11, 2013 Maximum [Member] 2012 Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowings	$ 40,000,000			$ 40,000,000		$ 40,000,000
Maximum borrowings Under certain conditions				70,000,000		70,000,000
Standby and commercial letter of credit sublimit		5,000,000				5,000,000		10,700,000						25,000,000
Maturity date of expiration	Aug. 09, 2016			Aug. 09, 2016			May 28, 2014
Margin rate range									1.25%	0.25%		2.00%	1.00%
Basis Point over the Federal Fund Rate											0.50%
Basis Point over Libor Rate											1.00%
Foreign currency obligations maximum														3,500,000
Fees and expenses in connection with Credit Facility		14,000			16,000
Balance of letters of credit under credit facility							8,564,000
Annual commitment fee							0.125%
Standby commission							1.00%
Credit Availability under credit Facility	37,026,000		39,510,000
Balance under the credit facility	$ 2,490,000

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Goodwill And Intangible Assets - Goodwill and Intangible Assets (Parenthetical) (Detail) (USD $)	1 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended
	Feb. 27, 2012 Customer relationships [Member]	Dec. 31, 2012 Customer relationships [Member]	Jun. 30, 2013 Patents [Member]	Dec. 31, 2012 Patents [Member]
Other Intangibles [Line Items]
Purchase price allocated to other intangible assets	$ 168,000	$ 168,000
Estimated useful lives of intangible assets acquired	5 years	5 years	20 years	20 years

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Stock-Based Compensation - Option Activity Under Principal Option Plans (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2013 Y
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Outstanding Options, Beginning Balance	135
Outstanding Options, Granted
Outstanding Options, Exercised	(18)
Outstanding Options, Forfeited
Outstanding Options, Expired
Outstanding Options, Ending Balance	117
Outstanding Options, Exercisable	102
Outstanding Options, Weighted Average Exercise Price, Beginning Balance	$ 12.79
Outstanding Options, Weighted Average Exercise Price, Granted
Outstanding Options, Weighted Average Exercise Price, Exercised	$ 12.65
Outstanding Options, Weighted Average Exercise Price, Forfeited
Outstanding Options, Weighted Average Exercise Price, Expired
Outstanding Options, Weighted Average Exercise Price, Ending Balance	$ 12.81
Outstanding Options, Weighted Average Exercise Price, Exercisable	$ 12.57
Outstanding Options, Weighted Average Remaining Life, Beginning Balance	4 years 3 months 29 days
Outstanding Options, Weighted Average Remaining Life, Granted
Outstanding Options, Weighted Average Remaining Life, Exercised
Outstanding Options, Weighted Average Remaining Life, Forfeited
Outstanding Options, Weighted Average Remaining Life, Ending Balance	3 years 11 months 5 days
Outstanding Options, Exercisable, Weighted Average Remaining Life	3 years 10 months 17 days
Outstanding Options, Aggregate Intrinsic Value, Beginning Balance	$ 670
Outstanding Options, Aggregate Intrinsic Value, Granted
Outstanding Options, Aggregate Intrinsic Value, Exercised
Outstanding Options, Aggregate Intrinsic Value, Forfeited
Outstanding Options, Aggregate Intrinsic Value, Expired
Outstanding Options, Aggregate Intrinsic Value, Ending Balance	1,436
Outstanding Options, Aggregate Intrinsic Value, Exercisable	$ 1,276

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Statement Of Financial Position [Abstract]
Preferred stock, no par value	$ 0	$ 0
Preferred stock, shares authorized	6,000,000	6,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.20	$ 0.20
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares issued	6,656,000	6,656,000
Treasury stock, shares	2,510,000	2,517,000

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Goodwill And Intangible Assets

6 Months Ended

Jun. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill And Intangible Assets

8. Goodwill And Intangible Assets

Acquisition in Fiscal 2012

On February 27, 2012, the Company purchased certain assets of Pro-Dex Astromec, Inc. (“Astromec”), a subsidiary of Pro-Dex Inc. (“Pro-Dex”), for approximately $1,050,000, which includes the assumption of liabilities for an estimated earn-out of $294,000. The acquisition was paid for in cash. SL Montevideo Technology, Inc. (“SL-MTI”) recorded direct acquisition costs of approximately $422,000 and $434,000 during the six months ended June 30, 2012 and during the twelve months ended December 31, 2012, respectively. Direct acquisition costs were recorded within selling, general and administrative expenses in the Consolidated Statements of Income.

At December 31, 2012, the financial statements reflected the final purchase price based on estimated fair values at the date of acquisition, including $670,000 in inventories, $202,000 in equipment, and $10,000 in other current assets. The acquisition resulted in intangible assets of $168,000 while no goodwill was recognized. Intangible assets were composed of a customer list with a useful life of 5 years. The purchase price also included $294,000 in liabilities related to an estimated earn-out, which is comprised of quarterly payments based on the performance of the acquired business over the three year period immediately following the date of acquisition. The total liability for the earn-out as of June 30, 2013 and December 31, 2012 was $158,000 and $221,000, respectively. During 2013, $88,000 was paid related to the earn-out. The results from the acquisition date through June 30, 2013 are included in the SL-MTI segment.

Goodwill And Intangible Assets

Intangible assets consist of the following:

	Amortizable Life (years)	June 30, 2013						December 31, 2012
		Gross Value		Accumulated Amortization		Net Value		Gross Value		Accumulated Amortization		Net Value
		(in thousands)
Finite-lived intangible assets:
Customer relationships (1)	5 to 8	$	3,868	$	3,257	$	611	$	3,868	$	3,078	$	790
Patents (2)	5 to 20		1,287		1,203		84		1,285		1,187		98
Developed technology	5 to 6		1,700		1,700		—		1,700		1,700		—
Licensing fees	5 to 10		450		367		83		450		340		110
Total amortized finite-lived intangible assets			7,305		6,527		778		7,303		6,305		998
Indefinite-lived intangible assets:
Trademarks			1,672		—		1,672		1,672		—		1,672
Other intangible assets, net		$	8,977	$	6,527	$	2,450	$	8,975	$	6,305	$	2,670

⁽¹⁾  On February 27, 2012, the Company purchased certain assets of Astromec, a subsidiary of Pro-Dex. Included in the purchase price is a customer list valued at $168,000. The estimated useful life of the asset is 5 years.

⁽²⁾  During 2013 and 2012, the Company’s MTE division capitalized legal fees related to a new patent application. The estimated useful life of the asset is 20 years.

In accordance with ASC 350 “Intangibles – Goodwill and Other,” goodwill and other indefinite-lived intangible assets are not amortized, but are tested for impairment. Such impairment testing is undertaken annually, or more frequently upon the occurrence of some indication that an impairment has taken place. The Company conducted an annual impairment test as of December 31, 2012.

A two-step process is utilized to determine if goodwill has been impaired. In the first step, the fair value of each reporting unit is compared to the net asset value recorded for such unit. If the fair value exceeds the net asset value, the goodwill of the reporting unit is not adjusted. However, if the recorded net asset value exceeds the fair value, the Company performs a second step to measure the amount of impairment loss, if any. In the second step, the implied fair value of the reporting unit’s goodwill is compared with the goodwill recorded for such unit. If the recorded amount of goodwill exceeds the implied fair value, an impairment loss is recognized in the amount of the excess.

For the testing conducted as of December 31, 2012, the Company concluded that no impairment charge was warranted. Going forward there can be no assurance that economic conditions or other events may not have a negative material impact on the long-term business prospects of any of the Company’s reporting units. In such case, the Company may need to record an impairment loss, as stated above. The next annual impairment test will be conducted as of December 31, 2013, unless management identifies a triggering event in the interim.

Management has not identified any triggering events, as defined by ASC 350, during 2013. Accordingly, no interim impairment test has been performed.

Estimated future amortization expense for intangible assets subject to amortization in each of the next five fiscal years is as follows:

	Amortization Expense (in  thousands)
2013	$	440
2014	$	401
2015	$	58
2016	$	39
2017	$	14

Total amortization expense, excluding the amortization of deferred financing costs, consists of amortization expense related to intangible assets and software. Amortization expense related to intangible assets for the three months ended June 30, 2013 and June 30, 2012 was $113,000 and $206,000 respectively. Amortization expense related to intangible assets for the six months ended June 30, 2013 and June 30, 2012 was $224,000 and $401,000, respectively. Amortization expense related to software for the three months ended June 30, 2013 and June 30, 2012 was $37,000 and $41,000, respectively. Amortization expense related to software for the six months ended June 30, 2013 and June 30, 2012 was $73,000 and $79,000, respectively.

Changes in goodwill balances by segment (defined below) are as follows:

	Balance December 31, 2012		Translation Adjustment			Balance June 30, 2013
	(in thousands)
SL Power Electronics Corp.	$	4,242	$	(9	)	$	4,233
High Power Group:
MTE Corporation		8,189		—			8,189
Teal Electronics Corp.		5,055		—			5,055
RFL Electronics Inc.		5,249		—			5,249
Goodwill	$	22,735	$	(9	)	$	22,726

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 2,015,000	$ 1,166,000	$ 4,781,000	$ 2,416,000
Other comprehensive income, net of tax:
Foreign currency translation	17,000	(113,000)	93,000	(94,000)
Comprehensive income	$ 2,032,000	$ 1,053,000	$ 4,874,000	$ 2,322,000

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Other Long - Term Liabilities - Other Long-Term Liabilities (Detail) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Other Liabilities Disclosure [Abstract]
Environmental	$ 17,200,000	$ 19,033,000
Unrecognized tax benefits, interest and penalties	792,000	657,000
Long-term incentive plan	255,000	220,000
Acquisition earn-out, long-term	37,000	57,000
Other long-term liabilities	$ 18,284,000	$ 19,967,000

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CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 974,000	$ 3,196,000
Receivables, net	32,145,000	30,306,000
Inventories, net	24,675,000	22,102,000
Other current assets	3,152,000	2,098,000
Deferred income taxes, net	3,362,000	3,415,000
Total current assets	64,308,000	61,117,000
Property, plant and equipment, net	10,483,000	9,593,000
Deferred income taxes, net	9,700,000	9,719,000
Goodwill	22,726,000	22,735,000
Other intangible assets, net	2,450,000	2,670,000
Other assets and deferred charges, net	1,281,000	1,303,000
Total assets	110,948,000	107,137,000
Current liabilities:
Debt, current portion	2,490,000
Accounts payable	17,884,000	18,838,000
Accrued income taxes	0	429,000
Accrued liabilities:
Payroll and related costs	4,685,000	4,955,000
Other	10,671,000	10,586,000
Total current liabilities	35,730,000	34,808,000
Deferred compensation and supplemental retirement benefits	1,796,000	1,930,000
Other long-term liabilities	18,284,000	19,967,000
Total liabilities	55,810,000	56,705,000
Commitments and contingencies
SHAREHOLDERS' EQUITY
Preferred stock, no par value; authorized, 6,000,000 shares; none issued
Common stock, $.20 par value; authorized, 25,000,000 shares; issued, 6,656,000 and 6,656,000 shares, respectively	1,331,000	1,331,000
Capital in excess of par value	21,814,000	21,578,000
Retained earnings	57,061,000	52,280,000
Accumulated other comprehensive (loss)	(359,000)	(452,000)
Treasury stock at cost, 2,510,000 and 2,517,000 shares, respectively	(24,709,000)	(24,305,000)
Total shareholders' equity	55,138,000	50,432,000
Total liabilities and shareholders' equity	$ 110,948,000	$ 107,137,000

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Goodwill And Intangible Assets - Amortization Expense for Intangible Assets Subject to Amortization (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Goodwill And Intangible Assets Disclosure [Abstract]
2013	$ 440
2014	401
2015	58
2016	39
2017	$ 14

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Inventories (Tables)

6 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

Inventories

Inventories consist of the following:

	June 30, 2013			December 31, 2012
	(in thousands)
Raw materials	$	17,510		$	15,726
Work in process		5,989			4,623
Finished goods		4,143			4,819
Gross inventory		27,642			25,168
Less: allowances		(2,967	)		(3,066	)
Inventories, net	$	24,675		$	22,102

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Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

17. Derivative Instruments and Hedging Activities

ASC Topic 815, as amended and interpreted, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. As required by ASC Topic 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to variability in expected future cash flows related to forecasted foreign exchange-based risk are considered economic hedges of the Company’s forecasted cash flows.

Risk Management Objective of Using Derivatives

The Company is a U.S. dollars (USD) functional currency entity that manufactures products in the USA, Mexico and China. The Company’s sales are priced in USD and its costs and expenses are priced in USD, Mexican pesos (MXN) and Chinese Yuan (CNH). As a result, the Company has exposure to changes in exchange rates between the time when expenses in the non-functional currencies are initially incurred and the time when the expenses are ultimately paid. The Company’s objective in using derivatives is to add stability and to manage its exposure to foreign exchange risks. To accomplish this objective, the Company uses foreign currency forward contracts to manage its exposure to fluctuations in the exchange rates. Foreign currency forward contracts involve fixing the USD-MXN and USD-CNH exchange rates for delivery of a specified amount of foreign currency on a specified date.

During 2012 and 2013, the Company entered into a series of foreign currency forward contracts to hedge its exposure to foreign exchange rate movements in its forecasted expenses in China and Mexico. The foreign currency forwards are not speculative and are being used to manage the Company’s exposure to foreign exchange rate movements. Foreign currency forward contracts involve fixing the USD-MXN and USD-CNH exchange rates for delivery of a specified amount of foreign currency on a specified date. The Company has elected not to apply hedge accounting to these derivatives and they are marked to market through earnings. Therefore, gains and losses resulting from changes in the fair value of these contracts are recognized at the end of each reporting period directly in earnings. The gains and losses associated with the foreign currency forward contracts are included in other gain (loss), net on the Consolidated Statements of Income. As of June 30, 2013, the fair value of the foreign currency forward contracts was recorded as an $84,000 liability in other current liabilities on the Consolidated Balance Sheets. As of December 31, 2012, the fair value of the foreign currency forward contracts was recorded as a $243,000 asset in other current assets on the Consolidated Balance Sheets.

Non-designated Hedges of Foreign Exchange Risk

The notional amounts are used to measure the volume of foreign currency forward contracts and do not represent exposure to foreign currency losses. The following table summarizes the notional values of the Company’s derivative financial instruments as of June 30, 2013.

Product	Number of Instruments		Notional
			(in thousands)
Mexican Peso (MXN) Forward Contracts		18	MXN	70,147
Chinese Yuan (CNH) Forward Contracts		9	CNH	49,750

The following table details the location in the financial statements of the gain or loss recognized on foreign currency forward contracts that are marked to market for the three and six months ended June 30, 2013 and June 30, 2012:

		Three Months Ended June 30, 2013				Three Months Ended June 30, 2012
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in  Income on Derivative	Amount of Gain (Loss)  Recognized in Income on Derivative			Location of Gain (Loss) Recognized in  Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative
		(in thousands)				(in thousands)
Foreign Exchange Contracts	Other gain (loss), net	$	(301	)	Other gain (loss), net	$	(162	)

		Six Months Ended June 30, 2013				Six Months Ended June 30, 2013
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in  Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative			Location of Gain (Loss) Recognized in  Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative
		(in thousands)				(in thousands)
Foreign Exchange Contracts	Other gain (loss), net	$	(327	)	Other gain (loss), net	$	(170	)

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Stock-Based Compensation - Additional Information 1 (Detail) (USD $)	3 Months Ended		6 Months Ended		0 Months Ended	3 Months Ended	6 Months Ended	12 Months Ended	3 Months Ended	6 Months Ended	12 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	May 09, 2013 Incentive Stock Plan (2008 Plan) [Member] Director Restricted Stock [Member]	Jun. 30, 2013 Incentive Stock Plan (2008 Plan) [Member] Director Restricted Stock [Member]	Jun. 30, 2013 Incentive Stock Plan (2008 Plan) [Member] Director Restricted Stock [Member]	Dec. 31, 2012 Incentive Stock Plan (2008 Plan) [Member] Director Restricted Stock [Member]	Jun. 30, 2013 2012 Long Term Incentive Plan [Member] Restricted Stock Units (RSUs) [Member]	Jun. 30, 2013 2012 Long Term Incentive Plan [Member] Restricted Stock Units (RSUs) [Member]	Dec. 31, 2012 2012 Long Term Incentive Plan [Member] Restricted Stock Units (RSUs) [Member]	Jun. 30, 2013 2013 Long Term Incentive Plan [Member] Restricted Stock Units (RSUs) [Member]	Jun. 30, 2013 2013 Long Term Incentive Plan [Member] Restricted Stock Units (RSUs) [Member]
Stock Based Compensation [Line Items]
Grant date						May 09, 2013	May 09, 2013	Apr. 02, 2012			Feb. 17, 2012	Mar. 05, 2013	Mar. 05, 2013
Weighted average price of restricted stock							$ 20.60	$ 19.57			$ 18.00	$ 19.17
Stock-based compensation cost, gross	$ 210,000	$ 595,000	$ 332,000	$ 744,000		$ 45,000		$ 431,000	$ 19,000	$ 29,000		$ 33,000	$ 43,000
Total unrecognized compensation cost related to restricted stock units						$ 264,000	$ 264,000		$ 84,000	$ 84,000		$ 336,000	$ 336,000
Maximum number of achievable RSUs									54,000	54,000		28,000	28,000
Number of restricted shares awarded to each director					3,000			3,000
Number of restricted shares awarded to the Chairman								10,000
Vesting period for share-based awards issued					1 year

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Debt - Schedule of Debt (Parenthetical) (Detail) (2012 Credit Facility [Member], USD $)	6 Months Ended
	Jun. 30, 2013
2012 Credit Facility [Member]
Line of Credit Facility [Line Items]
Revolving credit facility, borrowing capacity	$ 40,000,000
Revolving credit facility, maturity date	Aug. 09, 2016

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Discontinued Operations - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 site	Jun. 30, 2012
Discontinued Operations And Disposal Groups [Abstract]
(Loss) income from discontinued operations before income taxes	$ (390,000)	$ (401,000)	$ (748,000)	$ (714,000)
(Loss) income from discontinued operations, net of tax	$ (237,000)	$ (244,000)	$ (455,000)	$ (438,000)
Number of environmental sites			5

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Receivables - Receivables (Detail) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Receivables [Abstract]
Trade receivables	$ 29,907,000	$ 29,284,000
Less: allowance for doubtful accounts	(625,000)	(591,000)
Trade receivables, net	29,282,000	28,693,000
Other	2,863,000	1,613,000
Receivables, net	$ 32,145,000	$ 30,306,000

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Other Long - Term Liabilities (Tables)

6 Months Ended

Jun. 30, 2013

Other Liabilities Disclosure [Abstract]

Other Long - Term Liabilities

Other long-term liabilities consist of the following:

	June 30, 2013		December 31, 2012
	(in thousands)
Environmental	$	17,200	$	19,033
Unrecognized tax benefits, interest and penalties		792		657
Long-term incentive plan		255		220
Acquisition earn-out, long-term		37		57
Other long-term liabilities	$	18,284	$	19,967

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Unaudited Comparative Results of Segment Information

The unaudited comparative results for the three and six month periods ended June 30, 2013 and June 30, 2012 are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Net sales
SLPE	$	18,386	$	18,824	$	35,980	$	37,167
High Power Group		17,607		15,896		34,700		31,471
SL-MTI		9,060		9,077		18,154		18,676
RFL		4,733		5,102		10,047		10,925
Net sales	$	49,786	$	48,899	$	98,881	$	98,239

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
	(in thousands)
Income from operations
SLPE	$	1,131		$	479		$	2,181		$	268
High Power Group		2,038			1,585			4,152			2,950
SL-MTI		1,569			1,441			2,882			3,144
RFL		393			578			1,329			1,636
Unallocated Corporate Expenses		(1,500	)		(1,738	)		(2,927	)		(3,281	)
Income from operations	$	3,631		$	2,345		$	7,617		$	4,717

Total Assets by Segment

Total assets as of June 30, 2013 and December 31, 2012 are as follows:

	June 30, 2013		December 31, 2012
	(in thousands)
Total assets
SLPE	$	38,592	$	36,419
High Power Group		33,459		31,296
SL-MTI		13,445		12,012
RFL		13,104		13,744
Unallocated Corporate Assets		12,348		13,666
Total assets	$	110,948	$	107,137

Goodwill and Other Intangible Assets, Net by Segment

Goodwill and other intangible assets, net, as of June 30, 2013 and December 31, 2012 are as follows:

	June 30, 2013		December 31, 2012
	(in thousands)
Goodwill and other intangible assets, net
SLPE	$	4,541	$	4,563
High Power Group		15,180		15,343
SL-MTI		123		140
RFL		5,332		5,359
Goodwill and other intangible assets, net	$	25,176	$	25,405

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Recently Adopted and Issued Accounting Pronouncements

6 Months Ended

Jun. 30, 2013

Accounting Changes And Error Corrections [Abstract]

Recently Adopted and Issued Accounting Pronouncements

7. Recently Adopted and Issued Accounting Pronouncements

In July 2012, the FASB issued ASU 2012-02 “Intangibles-Goodwill and Other: Testing Indefinite-Lived Intangible Assets for Impairment,” which amends the guidance on impairment testing for indefinite-lived intangible assets. The amended guidance will allow companies to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. A company no longer will be required to test the fair value of an intangible asset unless the company determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. ASU 2012-02 is effective for interim and annual periods beginning after September 15, 2012. The implementation of this guidance did not have a material impact on the Company’s consolidated financial statements.

In October 1, 2012, the FASB issued ASU 2012-04 “Technical Corrections and Improvements,” which makes certain technical corrections and improvements and conforming amendments related to fair value measurements. The amendments represent changes to clarify, correct unintended application of, or make minor improvements to the FASB Accounting Standards Codification that are not expected to have a significant effect on current accounting practice. ASU 2012-04 is effective for fiscal periods beginning after December 15, 2012. The implementation of this guidance did not have a material impact on the Company’s consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, “Comprehensive Income (Topic 220) – Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income,” which requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety in the same reporting period. ASU 2013-02 is effective for fiscal periods beginning after December 15, 2012. The implementation of this guidance did not have a material impact on the Company’s consolidated financial statements.

In March 2013, the FASB issued ASU No. 2013-05, “Foreign Currency Matter (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity a consensus of the FASB Emerging Issues Task Force,” which permits an entity to release cumulative translation adjustments into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided, or, if a controlling financial interest is no longer held. ASU 2013-05 is effective for fiscal periods beginning after December 15, 2013. The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force),” which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. ASU 2013-11 is effective for fiscal periods beginning after December 15, 2013. The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

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Segment Information - Total Assets by Segment (Detail) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Total assets
Total assets	$ 110,948,000	$ 107,137,000
Operating Segments [Member] | SLPE [Member]
Total assets
Total assets	38,592,000	36,419,000
Operating Segments [Member] | High Power Group [Member]
Total assets
Total assets	33,459,000	31,296,000
Operating Segments [Member] | SL-MTI [Member]
Total assets
Total assets	13,445,000	12,012,000
Operating Segments [Member] | RFL [Member]
Total assets
Total assets	13,104,000	13,744,000
Unallocated Corporate Expenses [Member]
Total assets
Total assets	$ 12,348,000	$ 13,666,000

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Income Per Share (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Income Per Share

The table below sets forth the computation of basic and diluted net income per share:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands, except per share amounts)
Basic net income available to common shareholders:
Net income available to common shareholders from continuing operations	$	2,252		$	1,410		$	5,236		$	2,854
Diluted net income available to common shareholders from continuing operations	$	2,252		$	1,410		$	5,236		$	2,854
Shares:
Basic weighted average number of common shares outstanding		4,157			4,444			4,148			4,501
Common shares assumed upon exercise of stock options		47			13			41			17
Diluted weighted average number of common shares outstanding		4,204			4,457			4,189			4,518
Basic net income (loss) per common share:
Income from continuing operations	$	0.54		$	0.32		$	1.26		$	0.64
(Loss) from discontinued operations (net of tax)		(0.06	)		(0.06	)		(0.11	)		(0.10	)
Net income	$	0.48		$	0.26		$	1.15		$	0.54
Diluted net income (loss) per common share:
Income from continuing operations	$	0.54		$	0.32		$	1.25		$	0.63
(Loss) from discontinued operations (net of tax)		(0.06	)		(0.06	)		(0.11	)		(0.10	)
Net income	$	0.48		$	0.26		$	1.14		$	0.53

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Income Per Share - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Earnings Per Share [Abstract]
Anti-dilutive common share equivalents	0	7,000	0	6,000

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Accrued Liabilities - Other

6 Months Ended

Jun. 30, 2013

Text Block [Abstract]

Accrued Liabilities - Other

10. Accrued Liabilities – Other

Accrued liabilities – other consist of the following:

	June 30, 2013		December 31, 2012
	(in thousands)
Taxes (other than income) and insurance	$	500	$	602
Commissions		637		680
Litigation and legal fees		119		138
Other professional fees		374		418
Environmental		5,051		5,334
Warranty		1,380		1,102
Deferred revenue		76		56
Acquisition earn-out, current		121		164
Other		2,413		2,092
Accrued liabilities - other	$	10,671	$	10,586

Included in the environmental accrual are estimates for all known costs believed to be probable and reasonably estimable for sites that the Company currently operates or operated at one time (see Note 12 for additional information).

A liability is established for estimated future warranty and service claims that relate to current and prior period sales. The Company estimates warranty costs based on historical claim experience and other factors including evaluating specific product warranty issues.

The following is a summary of activity in accrued warranty and service liabilities:

	Six Months Ended June 30, 2013
	(in thousands)
Liability, beginning of year	$	1,102
Expense for new warranties issued		683
Warranty claims		(405	)
Liability, end of period	$	1,380

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Income Tax

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax

6. Income Tax

The Company calculates its interim tax provision in accordance with the provisions of ASC 740-270 “Income Taxes – Interim Reporting.” For each interim period the Company estimates its annual effective income tax rate and applies the estimated rate to its year-to-date income or loss before income taxes. The Company also computes the tax provision or benefit related to items separately reported, such as discontinued operations, and recognizes the items net of their related tax effect in the interim periods in which they occur. The Company also recognizes the effect of changes in enacted tax laws or rates in the interim periods in which the changes occur.

For the six months ended June 30, 2013 and June 30, 2012, the estimated income tax rate from continuing operations was 27% and 36%, respectively. The decrease in the effective tax rate was due to an increase in international rate differences and foreign tax credits, which were partially offset by certain permanent adjustments. The effective tax rate also decreased due to the recording of a research and development tax benefit of $594,000 in 2013, which was primarily related to the retroactive reinstatement of the federal research and development tax credits from the enactment of the American Tax Relief Act of 2012. These credits were not available to the Company in 2012.

During the three months ended June 30, 2013, the Company recorded additional benefits from federal and state research and development tax credits of $196,000 and $65,000, respectively. During the six months ended June 30, 2013, the Company recorded additional benefits from federal and state research and development tax credits of $496,000 and $98,000, respectively. The Company did not record additional benefits from federal research and development tax credits during the three and six months ended June 30, 2012.

As of June 30, 2013, the Company’s gross research and development tax credit carryforwards totaled approximately $1,294,000. Of these credits, approximately $610,000 ($200,000 federal and $410,000 state) can be carried forward for 15 years and will expire between 2014 and 2028, and approximately $685,000 of state credits can be carried forward indefinitely.

The Company has recorded gross unrecognized tax benefits, excluding interest and penalties, as of June 30, 2013 and December 31, 2012 of $710,000 and $595,000, respectively. Tax benefits are recorded pursuant to the provisions of ASC 740 “Income Taxes.” If such unrecognized tax benefits are ultimately recorded in any period, the Company’s effective tax rate would be reduced accordingly for such period.

The Company has been examined by the Internal Revenue Service (the “IRS”) through the calendar year 2010. State income tax statutes are generally open for periods back to and including the calendar year 2008.

It is reasonably possible that the Company’s gross unrecognized tax benefits balance may change within the next twelve months due to the expiration of the statutes of limitation of the federal government and various state governments by a range of zero to $38,000. The Company records such unrecognized tax benefits upon the expiration of the applicable statute of limitations or the settlement with tax authorities. As of June 30, 2013, the Company has a liability for unrecognized benefits of $433,000 for federal taxes and $277,000 for state taxes. Such benefits relate primarily to expenses incurred in those jurisdictions.

The Company classifies interest and penalties related to unrecognized tax benefits as income tax expense. At June 30, 2013, and December 31, 2012, the Company has accrued approximately $82,000 and $62,000 for the payment of interest and penalties, respectively.

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Basis of Presentation

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Basis of Presentation

1. Basis Of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation. Operating results for interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. These financial statements should be read in conjunction with the Company’s audited financial statements and notes thereon included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. Unless the context requires otherwise, the terms the “Company,” “SL Industries,” “we,” “us” and “our” mean SL Industries, Inc., a Delaware corporation, and its consolidated subsidiaries after Reincorporation (defined and described below) and SL Industries, Inc., a New Jersey corporation prior to Reincorporation. In the context of describing the Reincorporation, “SL-NJ” means SL Industries, Inc., a New Jersey corporation, and “SL-DE” means SL Industries, Inc., a Delaware corporation and wholly owned subsidiary of SL-NJ.

On May 9, 2013, the Company’s shareholders voted to approve a proposal to change the state of incorporation of SL Industries from the State of New Jersey to the State of Delaware by merging SL-NJ with and into SL-DE (the “Reincorporation”). On June 20, 2013 (the “Effective Date”), the Reincorporation was effected by merging SL-NJ with and into SL-DE pursuant to an Agreement and Plan of Merger, dated June 3, 2012, between SL-NJ and SL-DE. SL-DE survived the merger and SL-NJ ceased to exist. The principal reason for the Reincorporation was to give the Company a greater measure of flexibility and simplicity in corporate governance and provide greater clarity and predictability with respect to the Company’s corporate legal affairs. The Reincorporation did not result in any change in the name, business, management, fiscal year, accounting, location of the principal executive officers, assets or liabilities or net worth (other than the costs of reincorporation which were immaterial) of the Company.

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Goodwill And Intangible Assets - Changes in Goodwill Balances by Segment (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013
Goodwill [Line Items]
Goodwill, beginning balance	$ 22,735,000
Translation Adjustment	(9,000)
Goodwill, ending balance	22,726,000
SLPE [Member]
Goodwill [Line Items]
Goodwill, beginning balance	4,242,000
Translation Adjustment	(9,000)
Goodwill, ending balance	4,233,000
MTE Corporation [Member]
Goodwill [Line Items]
Goodwill, beginning balance	8,189,000
Translation Adjustment
Goodwill, ending balance	8,189,000
Teal Electronics Corp [Member]
Goodwill [Line Items]
Goodwill, beginning balance	5,055,000
Translation Adjustment
Goodwill, ending balance	5,055,000
RFL [Member]
Goodwill [Line Items]
Goodwill, beginning balance	5,249,000
Translation Adjustment
Goodwill, ending balance	$ 5,249,000

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Income Tax - Additional Information (Detail) (USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Income Tax Contingency [Line Items]
Effective income tax rate from continuing operations		27.00%	36.00%
Tax benefit related to research and development credit		$ 594,000
Additional benefits from federal research and development	196,000	496,000
Additional benefits from state research and development	65,000	98,000
Gross unrecognized tax benefits, excluding interest and penalties	710,000	710,000		595,000
Examination by IRS		The Company has been examined by the Internal Revenue Service (the "IRS") through the calendar year 2010. State income tax statutes are generally open for periods back to and including the calendar year 2008.
Gross unrecognized tax benefits balance, Minimum	0	0
Gross unrecognized tax benefits balance, Maximum	38,000	38,000
Liability for interest and penalties related to unrecognized tax benefits	82,000	82,000		62,000
Research Tax Credit Carryforward [Member]
Income Tax Contingency [Line Items]
Company's gross research and development tax credit carry forwards	1,294,000	1,294,000
Gross research and development tax credit indefinite carry forward	685,000	685,000
Research Definite Carry Forward [Member]
Income Tax Contingency [Line Items]
Company's gross research and development tax credit carry forwards	610,000	610,000
Company's federal gross research and development tax credit carry forwards	200,000	200,000
Company's state gross research and development tax credit carry forwards	410,000	410,000
Period of company's gross research and development tax credit carry forward		15 years
Expiration of company's gross research and development tax credit carry forward, Minimum		2014
Expiration of company's gross research and development tax credit carry forward, Maximum		2028
Domestic Tax Authority [Member]
Income Tax Contingency [Line Items]
Liability for unrecognized tax benefits	433,000	433,000
State and Local Jurisdiction [Member]
Income Tax Contingency [Line Items]
Liability for unrecognized tax benefits	$ 277,000	$ 277,000

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Debt (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Schedule of Debt

Debt as of June 30, 2013 consisted of the following:

	June 30, 2013
	(in thousands)
2012 Credit Facility:
$40 million variable interest rate revolving credit facility maturing in 2016	$	2,490
Total debt		2,490
Less: current portion		(2,490	)
Total long-term debt	$	—

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Fair Value Measurement and Financial Instruments - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Liabilities
Derivative financial instruments	$ 84
Assets
Derivative financial instruments		243
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) [Member]
Liabilities
Derivative financial instruments
Assets
Derivative financial instruments
Significant Other Observable Inputs (Level 2) [Member]
Liabilities
Derivative financial instruments	84
Assets
Derivative financial instruments		243
Significant Unobservable Inputs (Level 3) [Member]
Liabilities
Derivative financial instruments
Assets
Derivative financial instruments

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Commitments and Contingencies - Additional Information (Detail) (USD $)			6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Operable Unit 2 (OU-2) [Member]	Jun. 30, 2013 Pennsauken Site (OU-1 and OU-2) [Member]	May 28, 2013 Pennsauken Site (OU-1 and OU-2) [Member]	May 10, 2013 Pennsauken Site (OU-1 and OU-2) [Member]
Contingencies And Commitments [Line Items]
The estimated cost of the EPA selected remedy			$ 20,700,000
Estimated time to complete selected EPA remedy			7 years
Payment for past cost as per agreement installment amount				2,141,000
Payment for past cost as per agreement aggregate amount				10,705,000
Payment related to obligation						2,185,000
Letter of credit issued to provide financial assurance					8,564,000
State of NJ total claim for certain costs				1,800,000
State of NJ total claim for past and future cleanup costs				1,300,000
State of NJ total claim for natural resource damages				500,000
Company offer to resolve State of NJ claim				250,000
Estimated remediation costs, low estimate				18,169,000
Estimated remediation costs, high estimate				29,550,000
Total environmental accruals	22,251,000	24,367,000		18,169,000
Environmental accrual, long-term portion	$ 17,200,000	$ 19,033,000

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Segment Information

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment Information

13. Segment Information

The Company currently operates under four business segments: SL Power Electronics Corp. (“SLPE”), the High Power Group, SL-MTI and RFL Electronics Inc. (“RFL”). Teal Electronics Corp. (“TEAL”) and MTE Corporation (“MTE”) are combined into one business segment, which is reported as the High Power Group. The Company aggregates operating business subsidiaries into a single segment for financial reporting purposes if aggregation is consistent with the objectives of ASC 280 “Segment Reporting.” Business units are also combined if they have similar characteristics in each of the following areas:

• nature of products and services

• nature of production process

• type or class of customer

• methods of distribution

SLPE designs, manufactures and markets high-reliability power conversion products in internal and external footprints. The Company’s power supplies provide a reliable and safe power source for the customer’s specific equipment needs. SLPE, which sells products under three brand names (SL Power Electronics, Condor and Ault), is a major supplier to the original equipment manufacturers (“OEMs”) of medical, industrial/instrumentation, military and information technology equipment. The High Power Group sells products under two brand names (TEAL and MTE). TEAL designs and manufactures custom power conditioning and distribution units for OEMs of medical imaging, medical treatment, military aerospace, semiconductor, solar and advanced simulation systems. MTE designs and manufactures power quality products used to protect equipment from power surges, bring harmonics into compliance and improve the efficiency of variable speed motor drive systems. SL-MTI designs and manufactures high power density precision motors that are used in numerous applications, including military and commercial aerospace, oil and gas, and medical and industrial products. RFL designs and manufactures communication and power protection products/systems that are used to protect electric utility transmission lines and apparatus by isolating faulty transmission lines from a transmission grid. The Unallocated Corporate Expenses segment includes corporate related items, financing activities and other costs not allocated to reportable segments, which includes but is not limited to certain treasury, risk management, legal, litigation and public reporting charges and certain legacy costs. The accounting policies for the business units are the same as those described in the summary of significant accounting policies. For additional information, see Note 1 of the Notes to the Consolidated Financial Statements included in Part IV of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Business segment operations are conducted through domestic subsidiaries. For all periods presented, sales between business segments were not material. Each of the segments has certain major customers, the loss of any of which would have a material adverse effect on such segment.

The unaudited comparative results for the three and six month periods ended June 30, 2013 and June 30, 2012 are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Net sales
SLPE	$	18,386	$	18,824	$	35,980	$	37,167
High Power Group		17,607		15,896		34,700		31,471
SL-MTI		9,060		9,077		18,154		18,676
RFL		4,733		5,102		10,047		10,925
Net sales	$	49,786	$	48,899	$	98,881	$	98,239

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
	(in thousands)
Income from operations
SLPE	$	1,131		$	479		$	2,181		$	268
High Power Group		2,038			1,585			4,152			2,950
SL-MTI		1,569			1,441			2,882			3,144
RFL		393			578			1,329			1,636
Unallocated Corporate Expenses		(1,500	)		(1,738	)		(2,927	)		(3,281	)
Income from operations	$	3,631		$	2,345		$	7,617		$	4,717

Total assets as of June 30, 2013 and December 31, 2012 are as follows:

	June 30,		December 31,
	2013		2012
	(in thousands)
Total assets
SLPE	$	38,592	$	36,419
High Power Group		33,459		31,296
SL-MTI		13,445		12,012
RFL		13,104		13,744
Unallocated Corporate Assets		12,348		13,666
Total assets	$	110,948	$	107,137

Goodwill and other intangible assets, net, as of June 30, 2013 and December 31, 2012 are as follows:

	June 30, 2013		December 31, 2012
	(in thousands)
Goodwill and other intangible assets, net
SLPE	$	4,541	$	4,563
High Power Group		15,180		15,343
SL-MTI		123		140
RFL		5,332		5,359
Goodwill and other intangible assets, net	$	25,176	$	25,405

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Debt

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Debt

9. Debt

Debt as of June 30, 2013 consisted of the following:

	June 30, 2013
	(in thousands)
2012 Credit Facility:
$40 million variable interest rate revolving credit facility maturing in 2016	$	2,490
Total debt		2,490
Less: current portion		(2,490	)
Total long-term debt	$	—

The Company had no debt outstanding as of December 31, 2012.

On August 9, 2012, the Company entered into a Credit Agreement with PNC Bank, National Association, as administrative agent and lender (“PNC Bank”), and the lenders from time to time party thereto, as amended (the “2012 Credit Facility”), to replace its Amended and Restated Revolving Credit Agreement with Bank of America, N.A, as amended (the “2008 Credit Facility”). The 2012 Credit Facility provides for borrowings up to $40,000,000 and under certain conditions maximum borrowings up to $70,000,000. The 2012 Credit Facility included a $5,000,000 sublimit for letters of credit (subsequently amended on March 11, 2013, as described below) and provides for a separate $10,700,000 letter of credit which expires one year from the date of closing, with annual extensions. The 2012 Credit Facility expires on August 9, 2016.

Borrowings under the 2012 Credit Facility bear interest, at the Company’s option, at the London interbank offering rate (“LIBOR”) plus a margin rate ranging from 1.25% to 2.0%, or the higher of a Base Rate plus a margin rate ranging from 0.25% to 1.0%. The Base Rate is equal to the highest of (i) the Federal Funds Open Rate plus 0.5% and (ii) the Prime Rate and (iii) the Daily Libor Rate plus 1%. The margin rates are based on certain leverage ratios, as defined. The Company is subject to compliance with certain financial covenants set forth in the 2012 Credit Facility, including, but not limited to, indebtedness to EBITDA, as defined, minimum levels of fixed charges and limitations on capital expenditures, as defined. Availability under the 2012 Credit Facility is based upon the Company’s trailing twelve month EBITDA, as defined.

The Company’s obligations under the 2012 Credit Facility are secured by the grant of security interests in substantially all of its assets.

On March 11, 2013, the Company entered into a First Amendment (the “First Amendment”) to the 2012 Credit Facility. The First Amendment, among other things, (a) amends the Letter of Credit (“LC”) sublimit amount to the lesser of (i) an amount equal to $5,000,000 plus the aggregate amount of Designated Usage LC issued and outstanding under the Designated Usage LC sublimit or (ii) $25,000,000 and (b) allows the Company to enter into foreign currency exchange services with Loan Parties on an unsecured basis and that such obligations shall not exceed at any time an aggregate amount equal to $3,500,000. In consideration for this amendment, the Company incurred $14,000 in fees and expenses, which are amortized over the remaining life of the 2012 Credit Facility.

On May 28, 2013 a letter of credit in the amount of $8,564,000 was issued in favor of the Environmental Protection Agency (“EPA”) to provide financial assurance related to the Company’s environmental payments in accordance with the terms of the Consent Decree reached with the United States Department of Justice (“DOJ”) and EPA related to its liability for both OU-1 and OU-2 (see note 12 for additional information). The letter of credit expires on May 28, 2014 and requires an annual commitment fee of 0.125% and standby commission of 1%, and does not reduce amounts available under the 2012 Credit Facility.

On June 20, 2013, the Company entered into a Second Amendment and Joinder to Credit Agreement and to Security Agreement (the “Second Amendment”), which amends the 2012 Credit Facility in order to reflect the Reincorporation of the Company. The Second Amendment, among other things, joins the Company as a “Borrower” under the Credit Agreement and a “Debtor” under the Security Agreement entered into by SL-NJ in connection with the 2012 Credit Facility. In consideration for the Second Amendment, the Company incurred $16,000 in fees and expenses, which are amortized over the remaining life of the 2012 Credit Facility.

As of June 30, 2013, the Company had an outstanding balance of $2,490,000 under the 2012 Credit Facility. As of December 31, 2012 the Company had no outstanding balance under the 2012 Credit Facility. At June 30, 2013 and December 31, 2012, the Company had total availability under the 2012 Credit Facility of $37,026,000 and $39,510,000, respectively.

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Derivative Instruments and Hedging Activities - Notional Values of Company's Derivative Financial Instruments (Detail) (Not Designated as Hedging Instrument [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2013 Instruments
Mexican Peso (MXN) Forward Contracts [Member]
Derivative [Line Items]
Number of Foreign Currency Forward Contracts Held	18
Notional Amount of Foreign Currency Forward Contracts	$ 70,147
Chinese Yuan (CNH) Forward Contracts [Member]
Derivative [Line Items]
Number of Foreign Currency Forward Contracts Held	9
Notional Amount of Foreign Currency Forward Contracts	$ 49,750

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Fair Value Measurement and Financial Instruments

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurement and Financial Instruments

16. Fair Value Measurement and Financial Instruments

ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. FASB ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.

ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, FASB ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Currently, the Company uses foreign currency forward contracts to hedge its foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including spot rates and market forward points. The fair value of the foreign currency forward contracts is based on interest differentials between the currencies being traded, spot rates and market forward points.

To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees, where applicable.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of June 30, 2013, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

In conjunction with its implementation of updates to the fair value measurements guidance, the Company made an accounting policy election to measure derivative financial instruments subject to master netting agreements on a net basis.

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2013 and December 31, 2012, aggregated by the level in the fair value hierarchy within which those measurements fall:

	Quoted Prices in  Active Markets for Identical Assets and Liabilities (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs  (Level 3)		Balance at June 30,     2013
	(in thousands)
Liabilities
Derivative financial instruments	$	—	$	84	$	—	$	84

	Quoted Prices in  Active Markets for Identical Assets and Liabilities (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs  (Level 3)		Balance at December  31, 2012
	(in thousands)
Assets
Derivative financial instruments	$	—	$	243	$	—	$	243

The Company does not have any fair value measurements using significant unobservable inputs (Level 3) as of June 30, 2013 and December 31, 2012.

Credit Risk Contingent Features

The Company has agreements with its derivative counterparties that contain a provision where if the Company defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

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Retirement Plans and Deferred Compensation

6 Months Ended

Jun. 30, 2013

Compensation And Retirement Disclosure [Abstract]

Retirement Plans and Deferred Compensation

14. Retirement Plans And Deferred Compensation

During the six months ended June 30, 2013 and June 30, 2012, the Company maintained a defined contribution pension plan covering all full-time, U.S. employees of SLPE, the High Power Group, including TEAL and MTE, SL-MTI, RFL, and the corporate office. The Company’s contributions to this plan are based on a percentage of employee contributions and/or plan year gross wages, as defined. Costs incurred under these plans amounted to $181,000 and $397,000 during the three month and six month periods ended June 30, 2013 compared to $232,000 and $433,000 during the three month and six month periods ended June 30, 2012.

The Company has agreements with certain retired directors, officers and key employees providing for supplemental retirement benefits. The liability for supplemental retirement benefits is based on the most recent mortality tables available and discount rates ranging from 6% to 12%. The amount charged to expense in connection with these agreements amounted to $90,000 and $132,000 for the three month and six month periods ended June 30, 2013 compared to $101,000 and $201,000 for the three month and six month periods ended June 30, 2012.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Jul. 25, 2013
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Trading Symbol	SLI
Entity Registrant Name	SL INDUSTRIES INC
Entity Central Index Key	0000089270
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		4,138,000

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Discontinued Operations

6 Months Ended

Jun. 30, 2013

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

15. Discontinued Operations

For the three and six months ended June 30, 2013, total loss from discontinued operations before income taxes was $390,000 and $748,000 ($237,000 and $455,000, net of tax). For the three and six months ended June 30, 2012, total loss from discontinued operations before income taxes was $401,000 and $714,000 ($244,000 and $438,000, net of tax), respectively. The loss from discontinued operations during 2013 and 2012 relates to environmental remediation costs, consulting fees, and legal expenses associated with the past operations of the Company’s five environmental sites (See Note 12 – Commitments and Contingencies for further information concerning the environmental sites).

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Segment Information - Unaudited Comparative Results of Segment Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Net sales
Net sales	$ 49,786,000	$ 48,899,000	$ 98,881,000	$ 98,239,000
Income from operations
Income from operations	3,631,000	2,345,000	7,617,000	4,717,000
Operating Segments [Member] | SLPE [Member]
Net sales
Net sales	18,386,000	18,824,000	35,980,000	37,167,000
Income from operations
Income from operations	1,131,000	479,000	2,181,000	268,000
Operating Segments [Member] | High Power Group [Member]
Net sales
Net sales	17,607,000	15,896,000	34,700,000	31,471,000
Income from operations
Income from operations	2,038,000	1,585,000	4,152,000	2,950,000
Operating Segments [Member] | SL-MTI [Member]
Net sales
Net sales	9,060,000	9,077,000	18,154,000	18,676,000
Income from operations
Income from operations	1,569,000	1,441,000	2,882,000	3,144,000
Operating Segments [Member] | RFL [Member]
Net sales
Net sales	4,733,000	5,102,000	10,047,000	10,925,000
Income from operations
Income from operations	393,000	578,000	1,329,000	1,636,000
Unallocated Corporate Expenses [Member]
Income from operations
Income from operations	$ (1,500,000)	$ (1,738,000)	$ (2,927,000)	$ (3,281,000)

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Segment Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2013 Segment
Segment Reporting [Abstract]
Number of business segments	4