Exhibit 99.1
Magnetek Announces Fiscal 2008 First Quarter Results
MENOMONEE FALLS, Wisc.--(BUSINESS WIRE)--Oct. 31, 2007--Magnetek,
Inc. (NYSE:MAG) today reported the results of its fiscal 2008 first
quarter ended September 30, 2007.
First Quarter Results
In the fiscal 2008 first quarter the Company recorded revenue of
$26.1 million compared to $26.0 million in the first quarter of fiscal
2007. First quarter gross profit amounted to $7.3 million (28% of
sales) versus $7.4 million (29% of sales) in the same period a year
ago.
Operating costs, including research and development (R&D) and
selling, general and administrative (SG&A) expense, amounted to $6.4
million in the current-year quarter, down from $8.6 million in the
prior-year period. The Company had net interest income of $213,000 in
the current-year quarter versus net interest expense of $788,000 in
the first quarter of fiscal 2007.
Resulting income from continuing operations, net of taxes, in the
first quarter of fiscal 2008 amounted to $0.8 million or $.03 per
share against a loss from continuing operations of $2.3 million or
$.08 per share in the fiscal 2007 first quarter.
Including the results of discontinued operations, all of which
have been divested, Magnetek reported net income of $0.5 million or
$.02 per share in the first quarter of fiscal 2008 compared to a net
loss of $3.2 million or $.11 per share in the first quarter of fiscal
2007.
Operations and Outlook
Due primarily to reduced operating expenses and continued strength
in its largest product line, Magnetek's results improved significantly
on a year-over-year basis in the fiscal 2008 first quarter.
Historically, the September quarter has been relatively weak due
to factory shutdowns and summer vacations. However, Magnetek's
Material Handling product line generated record revenues of $17.2
million, accounting for two-thirds of Company sales, in the quarter.
Rising demand for crane automation systems, which enhance factory
productivity, and growing sales of the Company's new OmniPulse(TM)
direct-current crane drive contributed to the record performance.
Unfavorable sales mix impacted Elevator Systems results in the
quarter. The Company's high-end Quattro(TM) product line is gaining
market acceptance, however more slowly than anticipated. Eighty-five
of these new-technology systems, which regenerate energy to the
utility grid, are just now going into public service, with
building-site seminars for industry consultants commencing in
November.
While sales volume remains a factor in Telecom Power, gross
margins in this product line improved modestly in the quarter as a
result of increased operating efficiencies at Magnetek's new power
systems manufacturing facility in Menomonee Falls, Wisconsin.
Energy Systems' quarterly revenue declined versus prior periods
due to reduced sales of mining drives and the divestiture of
Magnetek's residential solar power inverter product line with its
power electronics business. Late in September, however, the Company
received orders for fuel cell power inverters totaling 2.4 megawatts
and commenced delivery of 60 E-Force(TM) wind power inverters, so
energy systems revenues will begin growing again in the current
(December) quarter.
Bookings totaled $28.0 million versus billings of $26.1 million in
the September quarter, for a book-to-bill ratio 1.08:1.00. Order
backlog at September 30, 2007 stood at $21.2 million against September
2006 backlog of $14.4 million and June 2007 backlog of $19.3 million.
Due primarily to increasing shipments of wind inverters, revenue
is expected to grow both sequentially and on a year-over-year basis in
the second fiscal quarter, however gross margin as a percentage of
revenue will likely decline in light of manufacturing variances and
lower margins in wind inverters during the ramp in production. As a
result, the Company expects second fiscal quarter profits to be
comparable to, or show a slight increase from, first quarter results.
Due to reductions in operating expenses, second quarter profits are
expected to be up significantly as compared to the same period in the
prior fiscal year.
Company Webcast
This morning, at 11:00 a.m. Eastern time, Magnetek management will
host a conference call to discuss Magnetek's fiscal 2008 first quarter
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, November 9 by phoning 617-801-6888 (passcode
89912007).
Magnetek, Inc. (NYSE:MAG) manufactures digital power and motion
control systems used in material handling, people moving, wireless
communications and 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.
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding the Company's anticipated financial
results for future periods, including the fiscal year ending June 29,
2008. 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 include, but are not limited to, economic conditions in general,
business conditions in material handling, elevator, mining,
communications and alternative energy markets, operating conditions,
competitive factors such as pricing and technology, risks associated
with acquisitions and divestitures, legal proceedings and the risk
that the company's ultimate costs of doing business exceed present
estimates. 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.
Magnetek, Inc.
Consolidated Results of Operations
(in thousands except per share data)
Three months ended
(Unaudited)
September 30, October 1,
Results of Operations: 2007 2006
- ----------------------------------------------------------------------
Net sales $ 26,110 $ 25,955
Cost of sales 18,827 18,535
- ----------------------------------------------------------------------
Gross profit 7,283 7,420
Research and development 843 1,219
Selling, general and administrative 5,516 7,397
- ----------------------------------------------------------------------
Income (loss) from operations 924 (1,196)
Interest income (356) (288)
Interest expense 143 1,076
- ----------------------------------------------------------------------
Income (loss) from continuing operations
before provision for income taxes 1,137 (1,984)
Provision for income taxes 304 276
- ----------------------------------------------------------------------
Income (loss) from continuing operations 833 (2,260)
Loss from discontinued operations, net of
taxes (334) (934)
- ----------------------------------------------------------------------
Net income (loss) $ 499 $ (3,194)
- ----------------------------------------------------------------------
Per common share - basic and diluted:
- ----------------------------------------------------------------------
Income (loss) from continuing operations $ 0.03 $ (0.08)
Loss from discontinued operations $ (0.01) $ (0.03)
- ----------------------------------------------------------------------
Net income (loss) $ 0.02 $ (0.11)
- ----------------------------------------------------------------------
Weighted average shares outstanding:
Basic 30,144 28,966
Diluted 30,404 28,966
- ----------------------------------------------------------------------
Three months ended
(Unaudited)
September 30, October 1,
Other Data: 2007 2006
- ----------------------------------------------------------------------
Depreciation expense $ 309 $ 330
Amortization expense (included in interest
expense) 107 212
Capital expenditures 385 43
September 30,
2007 July 1,
Balance Sheet Data: (Unaudited) 2007
- ----------------------------------------------------------------------
Working capital (excluding current portion of
LTD) $ 23,546 $ 21,982
Total assets 105,069 104,738
Total long-term debt (including current
portion) 29 32
Common stockholders' equity 43,194 41,473
Magnetek, Inc.
Consolidated Balance Sheet
(in thousands)
September 30,
2007 July 1,
(Unaudited) 2007
------------- ---------
Cash $ 4,262 $ 5,404
Restricted cash 23,722 22,852
Accounts receivable 17,004 18,104
Inventories 17,834 16,201
Prepaid and other current assets 2,411 1,900
------------- ---------
Total current assets 65,233 64,461
Property, plant & equipment, net 4,388 4,302
Goodwill 28,241 28,187
Other assets 7,207 7,788
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Total assets $105,069 $104,738
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Accounts payable $ 11,584 $ 12,238
Accrued liabilities 7,501 7,639
Accrued arbitration award 22,602 22,602
Current portion of long-term debt 11 11
------------- ---------
Total current liabilities 41,698 42,490
Pension benefit obligations, net 15,166 15,965
Long-term debt, net of current portion 18 21
Other long-term obligations 1,688 1,709
Deferred income taxes 3,305 3,080
Common stock 302 301
Paid in capital in excess of par value 134,637 134,449
Accumulated deficit (14,324) (14,823)
Accumulated other comprehensive loss (77,421) (78,454)
------------- ---------
Total stockholders' equity 43,194 41,473
Total liabilities and equity $105,069 $104,738
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CONTACT: Magnetek, Inc.
Robert Murray, 213-200-7606
bmurray@magnetek.com