Menomonee Falls-based Magnetek Inc. today announced it expects to report a non-cash pre-tax asset impairment charge of approximately $1 million in its fourth quarter operating results.
The company has determined that the value of its fixed assets used in the manufacture and test of renewable energy inverters is impaired, due to current incoming order and sales levels of the company’s inverters into renewable energy markets, and significantly diminished prospects for future sales of inverters.
The impairment charge reduces the net book value of the Company’s renewable energy fixed assets to zero.
Peter McCormick, Magnetek’s president and chief executive officer, said, “Renewable energy market conditions have been challenging throughout fiscal 2012, and we responded to the downturn earlier in the year by reducing our cost structure in that part of our business. While we plan to continue to provide parts and service for our existing installed base of inverters, we don’t intend to pursue new business opportunities in the renewable energy space. We firmly believe we have sustainable competitive advantages and better growth opportunities in our traditional served markets, primarily in material handling and other motion control markets. As a result, we intend to focus our future investments in those areas.”
