Menomonee Falls-based Magnetek Inc. today reported first quarter net income of $472,00, or 14 cents per share, down from $6.9 million, or $2.14 per share, in the same period a year ago.
The company’s net sales dipped to $25.1 million from $28.7 million a year ago.
The decrease in sales from the prior year quarter reflects sales declines of products for mining markets, and the company’s decision to no longer pursue new sales opportunities in renewable energy markets.
“Challenging conditions in mining markets, combined with moderating demand and seasonal factors in material handling markets, resulted in both a sequential and a year-over-year decline in both sales and profitability. In response, we focused our actions during the quarter on controlling our payroll and other discretionary costs. Despite the lower sales levels, our continuing operations remained profitable, and our first quarter adjusted EBITDA achievement was more than 10 percent of sales,” said Peter McCormick, Magnetek’s president and chief executive officer.
“Overall business conditions remain mixed, and accordingly, we are expecting slow economic growth in 2013. Market conditions in our business have remained somewhat soft to date in 2013. Our quotation levels are high, but the mix of our orders booked doesn’t reflect as many large scale projects as we’ve received in recent periods, mainly in material handling markets. In addition, conditions in mining markets remain challenging, and we expect that to continue in the near-term,” McCormick said. “Offsetting that, conditions in our served elevator markets remain stable, and we’ve seen strong year-over-year growth in sales of our wireless radio control products, so again, conditions are mixed,” said Mr. McCormick. “As a result, while we are experiencing some near-term softness in our business, we do expect momentum to pick up somewhat in the second half of 2013, particularly with some of these larger quoted projects. Mid- to longer-term, we continue to believe that we have tremendous opportunity to enhance shareholder value through a combination of growth in sales and profits, effective asset management, and a reduction in our pension obligation.”