2.5.2007: Meldung: Magnetek, Inc.: Fiscal 2007 Third-Quarter Results
Tuesday May 1, 9:00 am ET
MENOMONEE FALLS, Wis.---Magnetek, Inc. today reported its results for its fiscal 2007 third quarter, which ended on April 1, 2007.
In the quarter the Company recorded revenue of $23.3 million, down from $26.6 million in the third quarter of fiscal 2006, due primarily to lower sales of telecom power systems. Gross profit on the reduced revenues amounted to $6.9 million (29.6% of sales) versus $7.3 million (27.5% of sales) in the same period a year ago.
Magnetek"s operating expenses, consisting of research and development (R&D) and selling, general and administrative (SG&A) costs, declined $2.0 million (23%) to $6.5 million from $8.5 million in the third quarter of fiscal 2006. This reduction resulted from cuts in corporate overhead costs made possible by the Company"s restructuring of operations, as well as executive staff downsizing, and substantial completion of the development phases of R&D programs related to the Company"s new Quattro(TM) elevator drive systems and E-Force(TM) wind turbine power inverters.
Income from continuing operations in the third quarter of fiscal 2007 amounted to $235,000 or $.01 per share versus a loss from continuing operations of $1.9 million or $.08 per share in the same period last year.
Magnetek also reported a loss of $654,000 or $.02 per share related to discontinued operations in third quarter. This loss primarily resulted from final settlement of the closing balance sheet related to the divestiture of the Company"s power electronics business in the prior quarter. As a result, the Company reported a net loss of $.01 per share in third quarter against a net loss of $.15 per share in last year"s third quarter.
Compared to the prior year, higher third-quarter revenues of the Company"s Material Handling business were more than offset by lower sales in Telecom Power systems and to a lesser extent, Energy Delivery systems.
The revenue decline in Telecom Power was due primarily to the physical relocation of telecom systems manufacturing from Dallas to Magnetek"s manufacturing center in Menomonee Falls, WI, resulting in some production inefficiencies and shipment delays. The decline was magnified because the Company"s Telecom Power group had a particularly strong third quarter last year, shipping large orders of wireless cells on wheels (COWs) and cells on light trucks (COLTs) to telecom customers. Production efficiencies are improving in the current quarter and late shipments have been eliminated.
The decline in Energy Systems revenue was primarily due to the divestiture of the Company"s residential solar power inverter product line with the sale of its power electronics business.
During the third quarter, the Company"s book-to-bill ratio was l.05 to 1.00; and at the end of the quarter, backlog stood at $19.7 million, up from $17.7 million at the beginning of the quarter, and up from $11.3 million at the end of last year"s third quarter due to a large order for wind turbine power inverters booked in the current fiscal year.
As of the end of its fiscal third quarter, Magnetek had no debt and $27.3 million in cash, including $22.6 million to pay a patent arbitration award, if necessary, that the company is contesting in court. Capital expenditures in the fiscal third quarter were over $650,000, mainly related to investments in alternative energy and telecom systems production capacity.
Management expects Magnetek to post sequentially higher revenues and profits from operations in the current quarter.
Separately, Magnetek today announced that it has entered into an agreement to settle litigation with Samsung-Electro-Mechanics Co., Ltd. (SEMCO), a Korean corporation, whereby SEMCO agrees to pay Magnetek the total sum of $2.12 million in four semiannual installments between June 1, 2007 and December 1, 2008 to resolve a dispute in a development agreement. Magnetek will record the net present value of the payments, estimated at just over $2 million, in other income from continuing operations in its fiscal fourth quarter which ends on July 1, 2007.
This morning, at 11:00 a.m. Eastern time, Magnetek management will host a conference call to discuss Magnetek"s fiscal 2007 third-quarter and first-nine-months results. The conference call will be carried live and a replay of the call will be available on the "Investor Relations" page of Magnetek"s website www.magnetek.com for ninety days or as the call and its content remain timely. A replay of the call also will be available through Friday, May 4 by phoning 617-801-6888 (passcode 73398481).
Magnetek, Inc. (NYSE:MAG - News) manufactures digital power and motion control systems used in material handling, people moving, wireless communications and clean-energy delivery. The Company is headquartered in Menomonee Falls, WI in the greater Milwaukee area and operates manufacturing plants in Pittsburgh, PA and Mississauga, Ontario, Canada as well as Menomonee Falls.
For the fiscal year ended July 2, 2006, Magnetek"s revenues were $101.6 million, including results of its communications power systems business(a).
(a) During its fiscal 2007 second quarter, Magnetek decided to retain its telecom power systems business as a continuing operation, and the results of that business were reclassified from discontinued operations to continuing operations.
Robert Murray, 213-200-7606
Source: Magnetek, Inc.