Magnetek Inc., which recently moved its corporate headquarters to Menomonee Falls from Chatsworth, Calif., today reported a rocky fiscal first quarter as the company absorbed the costs of the move and the divestiture of its Power Electronics Group.
Magnetek, which manufactures digital power and motion control systems used in material-handling, people-moving, telecommunications and energy management, today reported a quarterly net loss of $3.2 million, or 11 cents per share, which was worse than the firm's net loss of $1.1 million, or 4 cents per share, in the same period a year ago.
In a conference call with investors and analysts this morning, David Reiland, who was named Magnetek's new chief executive officer at the firm's annual meeting Oct. 25, acknowledged that the next quarter also is likely to be a "messy one," but he said the company is positioned to return to profitability in early 2007.
"Magnetek is a new company … The new Magnetek is basically a power and motion control systems company," Reiland said. "The pieces are falling into place, and the new Magnetek is coming together."
Net cash proceeds from the divestiture of the Power Electronics Group, amounting to approximately $68 million in cash, have been used to repay all of Magnetek's remaining debt (approximately $29 million), and the balance will be used to fund Magnetek's pension obligations and to support ongoing operations.
Reiland said Magnetek is capable of achieving double-digit revenue growth, gross profit margins of 30 percent or more, operating margins in the mid- to high-single digits, and consistent, positive cash flow.
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