Magnetek reports strong quarter

Menomonee Falls-based Magnetek Inc. today reported second quarter net income of $2.3 million, or 70 cents per share, up from $1.2 million, or 36 cents per share, in the same period a year ago.

The company’s quarterly sales remained flat at $27.0 million.

Both income from operations and earnings per share were up significantly year-over-year, due to improvements in gross margins, effective cost control and lower pension expense.

“End market conditions improved throughout much of our second quarter, and while our sales level was steady with last year, on a sequential basis our sales were up 12% from our first quarter,” said Peter McCormick, Magnetek’s president and chief executive officer. “Compared to the first quarter, sales for material handling applications, our largest served market, were up nearly 10 percent, while sales into elevator markets were up 15 percent. In addition, our second quarter gross margin increased to 36 percent of sales, and our operating profit margin exceeded our stated target of 10 percent. In summary, we challenged the organization to improve our operating performance, and our people responded very well, as we not only saw healthy growth in our business, but also controlled our costs and managed our assets quite well.”

Looking ahead, McCormick said, “In summary, mid- to longer-term, we continue to believe that we have great opportunities to increase the value of the company through a combination of steady growth in sales and profits, consistently strong cash flow generation, and further reductions in our pension obligation.”

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