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Meldungen 24.02.2015

Magnetek: Fiscal 2014 Fourth Quarter Preview

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Magnetek, Inc. (MAG) revised the expected revenue and profitability range for its fiscal 2014 fourth quarter, which ended December 28, 2014. In addition, the Company has also updated its pension plan measurement as of the end of fiscal 2014, and finalized the results of a related pension lump sum window program.

The Company currently expects revenue of $29 million for the fourth quarter of fiscal 2014, compared with the prior estimated range of $27.0 million to $27.5 million. Given the increase in sales volume over the previous estimate, the Company further expects to report net income from continuing operations, adjusted to exclude a non-cash pension settlement charge of $37.1 million, in the range of $1.00 to $1.02 per share for the fourth quarter of fiscal 2014. The Company previously estimated net income from continuing operations for the fourth quarter of fiscal 2014, adjusted for the pension settlement charge, of $.65 to $.75 per share. Including the pension settlement charge, the Company expects to report a net loss from continuing operations of $33.0 million to $33.5 million, or a loss of $9.35 to $9.50 on a per share basis for the fourth quarter of fiscal 2014.

During 2014, in an effort to reduce the size, volatility, mortality risk, and costs of the pension plan, the Company offered a lump sum payout of pension benefits (a “lump sum window”) to 2,970 eligible deferred vested participants. The program, which was funding-neutral, was completed in December 2014. A total of 2,230 participants, or 75%, elected the lump sum option, with a total amount of $46.9 million paid out of pension plan assets. The Company’s pension liability was reduced by a similar amount.

In connection with the lump sum window, the Company expects to record a non-recurring, non-cash settlement charge of $37.1 million as a component of its pension expense in the fourth quarter of fiscal 2014. The settlement charge had no impact on the Company’s cash flow or financial position and is expected to reduce future pension expense.

As of the end of fiscal 2014, the Company measured its pension plan for accounting purposes using a discount rate assumption of 3.55%, down from 4.45% at the end of fiscal 2013. The Company currently expects to report a net pension liability in the range of $25 million to $30 million as of December 28, 2014. The net pension liability entering fiscal 2014 was $48 million. From a funding standpoint, the Company is not required to make any mandatory contributions to the pension plan in fiscal 2015, while projected future contributions to achieve fully funded status are currently estimated at $25 million.

The Company expects to release final results for the fourth quarter and full fiscal year 2014 on March 12, 2015, following completion of its annual audit.


About Magnetek, Inc.

Magnetek, Inc. (MAG) manufactures digital power and motion control systems used in material handling, people moving and energy delivery. The Company is headquartered in Menomonee Falls, Wis. in the greater Milwaukee area and operates manufacturing plants in Pittsburgh, Pa. and Bridgeville, Pa. as well as Menomonee Falls.


Contact:
Magnetek, Inc.
Marty Schwenner, 262-703-4282
Vice President, Chief Financial Officer
mschwenner@magnetek.com

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