Magnetek, Inc., today announced results for the first quarter of fiscal 2003, ended September 30, 2002. Revenue for the quarter was U.S. $42.8 million, compared to $52.5 million and $44.2 million in the first and fourth quarters of fiscal 2002, respectively. Gross profit amounted to $9.8 million (22.8 percent of revenue) against $11.8 million (22.6 percent of revenue) in the first quarter of fiscal 2002 and $10.3 million (23.2 percent of revenue) in the fourth quarter of fiscal 2002.
Including a non-recurring gain, Magnetek reported net income of $15.7 million or $0.67 per diluted share for the first-quarter fiscal 2003. Due primarily to this gain, shareholders' equity increased to $158.2 million from $142.8 million three months earlier.
Excluding the non-recurring pre-tax gain of $27.8 million, Magnetek had a $2.2 million operating loss in fiscal 2003's first quarter versus a $1.6 million operating profit and a $.5 million operating loss in the first and fourth quarters of fiscal 2002, respectively. In the quarter just ended, excluding the non-recurring gain, the company had a net loss of $1.5 million or $0.06 per diluted share compared with net income of $1.1 million or $0.05 per diluted share in the prior-year first quarter and a net loss of $0.4 million or $0.02 per diluted share in the prior-year fourth quarter.
Magnetek's backlog reached $53 million as of September 30, according to Chief Executive Andrew Galef. "Based on current order activity and scheduled deliveries, our revenue should increase significantly in the current quarter," Mr. Galef said. "However, our gross profit margins may not rise correspondingly due to pricing pressures on lower-end power supplies and production inefficiencies associated with new product manufacturing start-ups. As we announced on July 25 and August 13, SG&A expenses will be higher due to changes in employee benefit costs. Also, in spite of continuing difficult conditions in Communications and Information Technology markets, we have increased our investments in R&D and marketing to assure our continued technological leadership and to upgrade our customer service capabilities."
"We are seeing the positive effects of new product introductions and share gains especially in Consumer and Industrial markets, both of which continue to grow," Mr. Galef continued. "In the quarter just ended, we entered some very promising new markets in Transportation (railroad train emergency power) and Alternative Energy (wind turbine power conditioners), which we recently announced." In addition, we have launched a major organizational and marketing initiative to gain shares of available Telecom markets through systems integration services for wireless, broadband access, wireline central offices, homeland security (such as 'E911') and microwave.
"We don't anticipate short-term growth in embedded power supplies, such as d.c.-to-d.c. converters, because discounted inventories still overhang the market," he continued. "However, in just the past six months, eight first-tier manufacturers' rep firms in North America (IRI, J-Squared Technologies, Southbridge, Luscombe, Nexus, Elcom, Thom Luke Sales and Wescom Marketing) have signed up to carry our line, and we expect to gain market share through their representation. We have also just signed up our first North American power-electronics distributor, Symmetry Electronics."
Magnetek, Inc. manufactures digital power supplies and systems used in distributed power generation, industrial controls, medical electronics, semiconductor processing, consumer products, telecommunications, information technology and other applications. It operates manufacturing and research facilities in North America, Europe, and Asia, employing approximately 1,600 people. It had a reported revenue of $188 million for fiscal 2002, which ended June 30, 2002.
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