Magnetek, Inc. reported the results of its 2007 fiscal year and fourth quarter ended July 1, 2007. In the fourth fiscal quarter the company recorded revenue of $27.0 million, a 6% increase over the fourth quarter of fiscal 2006 and, sequentially, a 16% increase over the third quarter of fiscal 2007, which was depressed somewhat by normal seasonal factors.
Gross profit amounted to $7.5 million (28% of sales) in the fourth quarter of fiscal 2007 versus $7.6 million (30% of sales) in the same period a year ago and, sequentially, a 9% increase over $6.9 million (30% of sales) in the third quarter of fiscal 2007. Production ramp-up costs related to the company’s new E-Force™ wind turbine power inverter, sales mix in the elevator motion control business, and higher telecom power systems material costs were primarily responsible for the decline in gross margin.
Operating expenses, consisting of research and development (R&D) and selling, general and administrative (SG&A) costs, declined $2.6 million to $6.0 million in the fourth quarter of fiscal 2007 from the prior-year period. This reduction resulted primarily from cuts in administrative overhead made possible by the company’s restructuring of operations, as well as executive staff downsizing. Operating expenses declined $0.5 million from the third quarter of fiscal 2007, primarily due to lower variable incentive compensation costs.
Income from continuing operations in the fourth quarter of fiscal 2007 amounted to $1.4 million or $.05 per share versus a loss from continuing operations of $2.2 million or $.07 per share in the same period last year. Magnetek also reported income of $0.4 million or $.01 per share related to discontinued operations in fourth quarter of 2007, including a gain of $2.0 million from the favorable settlement of a product development dispute, partially offset by legal and other costs. Including results of discontinued operations, the company recorded net income of $1.8 million or $.06 per share in the fourth quarter of fiscal 2007 versus a net loss of $39.6 million or $1.37 per share in the fourth quarter of fiscal 2006.
For the full year, as in fiscal 2006, Magnetek’s overall performance was heavily impacted by results of discontinued operations as well as restructuring costs. The company recorded revenue of $103.8 million in fiscal 2007, up from $101.7 million in the prior year. Gross profit amounted to $28.9 million (28% of sales) versus $30.1 million (30% of sales) in fiscal 2006. Operating expenses totaled $32.0 million in 2007 against $33.4 million in fiscal 2006. Continuing operations lost $5.2 million or $.18 per share for the full year versus a loss of $7.4 million or $.25 per share in fiscal 2006, while discontinued operations lost $ 2.8 million or $.10 per share in fiscal 2007 versus a loss of $ 39.5 million or $1.36 per share in fiscal 2006.
Including results of discontinued operations, the company recorded a net loss of $8.0 million or $.27 per share in fiscal 2007 against a net loss of $46.8 million or $1.62 per share in fiscal 2006.
