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Magnetek, Inc. (“Magnetek” or “the Company”) (NYSE: MAG) today reported the results of its 2011 fiscal year and fourth quarter ended July 3, 2011.
Fourth Quarter Results
In its fourth quarter of fiscal 2011 Magnetek recorded revenue of $31.1 million, a 28% increase from the fourth quarter of fiscal 2010 and a 12% sequential increase from the third quarter of fiscal 2011. The increase in sales from the prior year quarter reflects year-over-year sales growth in the Company’s served material handling, elevator and mining markets. As a result, fiscal 2011 fourth quarter earnings per share from continuing operations more than doubled to $.05 per share over prior year fourth quarter earnings per share from continuing operations.
“Our fourth quarter sales result exceeded our expectations, highlighted by record sales of more than $31 million. While some believe the economic recovery in the U.S. is stalling, most of our end markets continue to show signs of steady growth and recovery, particularly on the industrial side of our business,” said Peter McCormick, Magnetek’s president and chief executive officer. “We’re forecasting continued moderate economic expansion and, as a result, we’ve accelerated the level of investments we’re making in product development and sales channel expansion aimed at driving future sales growth. We continue to believe we are well positioned to outpace overall economic growth rates with our continuing focus on both new product introductions as well as new market initiatives,” said McCormick.
Gross profit amounted to $10.4 million (33% of sales) in the fourth quarter of fiscal 2011 versus $7.2 million (29% of sales) in the same period a year ago. The increase in gross profit and gross margin was mainly due to higher sales volume of products with material handling and mining applications.
Total operating expenses, consisting of research and development (“R&D”), pension expense and selling, general and administrative (“SG&A”) costs, were $8.8 million in the fourth quarter of fiscal 2011, compared to operating expenses of approximately $6.3 million in the prior year period. Compared to the prior year fourth quarter, current year operating expenses were impacted by higher R&D expenses, higher sales and marketing expenses, from both volume-related selling expenses and increased payroll-related costs, and increased incentive compensation provisions, partially offset by lower pension expense. The Company also reinstated wage and salary increases and its employer 401(k) matching contributions given the improvement in performance experienced during fiscal 2011.