Magnetek, Inc. (“Magnetek” or “the Company”)(NYSE: MAG) announced today that the Company received conditional approval of its request for a waiver of the minimum funding requirements of the Company’s defined benefit pension plan (the “Plan”) for the 2011 plan year. The amount of the funding waiver requested was approximately $17 million, scheduled to be funded in quarterly installments from April 2011 through January 2012, with a final installment due in September 2012. The Internal Revenue Service (“IRS”) informed the Company that the agency is prepared to grant the waiver request subject to the following conditions:
- The Company agrees to resume its required quarterly contributions in a timely manner beginning April 15, 2012.
- The Company makes contributions to the Plan sufficient to meet the minimum funding requirements for the Plan years 2012 through 2016.
- The Company provides collateral acceptable to the Pension Benefit Guarantee Corporation (“PBGC”) for the full amount of the 2011 plan year waiver.
“We believe this decision is in the best long-term interests of the Company and our stakeholders, including our employees and our pensioners. We would like to thank all of those at both the IRS and the PBGC who worked diligently with us on this issue over the past several months,” said Marty Schwenner, Magnetek’s chief financial officer. “We expect the funding waiver will have a significant favorable impact on our cash flow over the next several quarters, as evidenced by our strong positive cash flow in our most recently reported fourth quarter. Foremost, the funding waiver should enable us to strengthen our balance sheet by building our cash reserves at a time of increasing economic uncertainty. To a lesser extent, it will also provide us with additional resources to prudently allocate to growth opportunities in our business,” said Mr. Schwenner.The Company intends to issue an updated press release upon receipt of the unconditional final waiver approval from the IRS. About Magnetek, Inc. Magnetek, Inc. provides digital power and motion control systems used in overhead material handling, elevator, and energy delivery applications. The Company is North America’s largest supplier of digital drive systems for industrial cranes, hoists, and monorails. Magnetek provides Energy Engineered ® drives, radio remote controls, motors, and braking and collision avoidance subsystems to North America’s foremost overhead material handling crane builders. The Company is also the world’s largest independent builder of highly integrated digital motion control systems for high-rise, high-speed elevators. In energy delivery, Magnetek develops and markets digital power inverters that connect renewable energy sources to the utility grid, and is a leading independent supplier of digital motion control systems for underground coal mining applications. Magnetek is headquartered in Menomonee Falls, Wis., in the greater Milwaukee area and operates manufacturing facilities in Pittsburgh, Pa., and Canonsburg, Pa., as well as Menomonee Falls. Special Note Regarding Online Availability of Magnetek Releases and Filings All Magnetek financial news releases and filings with the Security and Exchange Commission (“SEC”) are posted to the Magnetek website. Material and financial releases as well as SEC filings are available at www.magnetek.com . Automatic email alerts for these postings are available from the Investor Relations section of the site. Corporate and general releases as well as product information are also available at www.magnetek.com . Special Note Regarding Forward-Looking Statements 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 its transition period 2011 and fiscal year 2012. These forward-looking statements are based on the Company's expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in, contemplated by, or underlying these forward-looking statements. These include, but are not limited to, unanticipated changes related to the status of the funding waiver, economic conditions in general, business conditions in material handling, elevator, mining, and renewable 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.