MagneTek Inc. Reports Operating Results (10-K)
Magnetek Inc. has a market cap of $35.5 million; its shares were traded at around $1.14 with and P/S ratio of 0.4. MAG is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates, John Keeley of Keeley Fund Management.
Highlight of Business Operations:The aggregate market value of the voting stock held by non-affiliates of the Registrant, based on the closing price of $1.70 per share as reported by the New York Stock Exchange, on December 24, 2009 (the last business day of the Company s most recently completed second fiscal quarter), was $52,317,605. Shares of common stock held by each executive officer and director have been excluded since such persons may be deemed affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
Our backlog as of the end of fiscal 2010 was $22.8 million versus $9.0 million at the end of fiscal 2009. The increase in backlog is primarily due to an increase of $11.7 million in our backlog of wind inverters as well as an increase of nearly $2.0 million in our backlog of material handling systems. While we use our backlog figure as an indicator of future sales activity, we have historically had a significant amount of revenue derived from orders that are booked and shipped within the same reporting period. We expect most of the orders in our backlog to be filled during the first half of fiscal 2011.
Our research and development activities, which are conducted primarily in Menomonee Falls, Wisconsin, are directed toward developing new products, improving existing products and customizing or modifying products to meet customers specific needs. Total research and development expenditures were approximately $3.8 million, $3.5 million and $3.2 million for our 2010, 2009 and 2008 fiscal years, respectively.
International sales accounted for 12% of our net sales in fiscal 2010. We define international sales as sales of products manufactured by our facilities outside the U.S. that are sold outside of the U.S., as well as sales of products manufactured in the U.S. to purchasers outside of the U.S. For our 2010, 2009 and 2008 fiscal years, revenues derived from domestic sales were $71.1 million, $84.4 million and $88.8 million respectively, and revenues derived from international sales were $9.5million, $13.8 million and $11.2 million, respectively. We hold assets in Canada and the United Kingdom totaling $5.2 million, of which $4.0 million are held in Canada and $1.2 million are in the United Kingdom.
As previously reported by the Company, Universal Lighting Technologies, Inc. (“ULT”) and Ole K. Nilssen (“Nilssen”) entered into a consent judgment in April 2008, for dismissal, on collateral estoppel grounds, of the patent infringement lawsuit filed by Nilssen against ULT. We had provided the defense in the lawsuit pursuant to an indemnification claim from ULT subject to the terms of the sale agreement under which ULT purchased Magnetek s lighting business in 2003. In September 2009, Nilssen and ULT entered into a settlement agreement relating to attorney s fees. Under the settlement agreement, Nilssen paid to us an amount of $0.75 million as attorney s fees as well as a nominal amount for costs. However, if Nilssen files a Rule 60 Motion and is successful such that ULT ceases to be the “prevailing party” and is no longer entitled to attorney s fees, then we are obligated to refund the $0.75 million attorney s fees settlement amount.
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