Magnetek Announces Fiscal 2007 Third-Quarter Results.MENOMONEE FALLS Menomonee Falls (mənŏm`ənē), village (1990 pop. 26,840), Waukesha co., SE Wis., on the Menominee River; inc. 1892. Wire, metal, paper, concrete, plumbing fixtures, furniture, fiberglass products, machine tools, steel, and aluminum , Wis. -- Magnetek, Inc. (NYSE NYSE See: New York Stock Exchange :MAG) 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 Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , 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 overhead costs see fixed costs. made possible by the Company's restructuring of operations, as well as executive staff downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) 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 continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the 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 Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. 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. Operations 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 (1) A logic gate that converts the input to the opposite state for output. If the input is true, the output is false, and vice versa. An inverter performs the Boolean logic NOT operation. (2) A circuit that converts DC current into AC current. Contrast with rectifier. product line with the sale of its power electronics business. During the third quarter, the Company's book-to-bill ratio Book-to-Bill Ratio The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled. Notes: This ratio tells whether the company has more orders than it can deliver (if greater than 1), has the same amount of orders that it can 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 An arbitration award (or arbitral award) is a determination on the merits by an arbitration tribunal in an arbitration, and is analogous to a judgment in a court of law. , 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 An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. with Samsung-Electro-Mechanics Co., Ltd. (SEMCO SEMCO Southeastern Michigan Computer Organization, Inc. SEMCO Samsung Electro-Mechanics Co., Ltd. SEMCO Systems Engineering and Management Company SEMCO Salisbury Engineering Manufacturing Company (Missouri) ), 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. Company Webcast 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 Investor relations The process by which the corporation communicates with its investors. " 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) manufactures digital power and motion control systems used in material handling, people moving, wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. 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. This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including statements regarding the Company's anticipated financial results for its fourth quarter and fiscal year ending July 1, 2007. These forward-looking statements are based on the Company's expectations and are subject to risks and uncertainties that cannot be predicted or quantified and are beyond the Company's control. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying these forward-looking statements. These risks and uncertainties include operating, economic and market conditions, audit costs and findings, legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. and their effects on the Company's financial results. Other factors that could cause actual results to differ materially from expectations are described in the Company's reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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