Magnetek, Inc. (“Magnetek” or “the Company,” NASDAQ: MAG) today reported the results of its second quarter of fiscal year 2013, ended June 30, 2013.
Second Quarter Results
In the second quarter of fiscal 2013, Magnetek recorded revenue of $27.0 million, a 7% decrease from the second quarter of fiscal 2012. The decrease in sales from the prior year quarter reflects sales declines of products for mining markets, and the Company’s decision to no longer pursue new sales opportunities in renewable energy markets. The lower sales volume, together with modestly higher operating expenses, resulted in second quarter earnings per share from continuing operations decreasing to $.36 per share compared to prior year earnings from continuing operations of $.70 per share.
“While our sales levels declined from the prior year second quarter, that was mainly due to significantly lower sales into renewable energy markets following our decision late last year to focus on our traditional served markets, combined with continuing challenging conditions in mining markets. Despite the decrease in total Company sales from last year’s second quarter, we managed to grow our sales into material handling and elevator markets year-over-year. In addition, our second quarter gross margin was nearly 35% and our continuing operations remained firmly profitable, with second quarter adjusted EBITDA achievement of nearly 13% of sales,” said Peter McCormick, Magnetek’s president and chief executive officer.Gross profit amounted to $9.3 million (34.6% of sales) in the second quarter of 2013 versus $10.2 million (35.0% of sales) in the same period a year ago. The decrease in gross profit and gross margin was primarily due to lower sales volume of products with mining and renewable energy applications, partially offset by higher sales into material handling and elevator markets. Total operating expenses, consisting of research and development, pension expense, and selling, general and administrative costs, were $7.9 million in the second quarter of 2013, compared to $7.6 million in the second quarter of fiscal 2012. Compared to the prior year, the increase in operating expenses was mainly due to higher payroll-related costs and discretionary spending.