SUBSCRIBE TO TMCnet
TMCnet - World's Largest Communications and Technology Community
 
| More

TMCNet:  MAGNETEK, INC. - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations

[November 09, 2012]

MAGNETEK, INC. - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations

(Edgar Glimpses Via Acquire Media NewsEdge) Overview Magnetek, Inc. ("Magnetek," "the Company," "we," or "us") is a global provider of digital power control systems that are used to control motion and power primarily in material handling, elevator, mining and renewable energy applications. Our digital power control systems serve the needs of selected niches of traditional and emerging markets that are becoming increasingly dependent on "smart" power. We are North America's largest independent supplier of digital drives, radio controls, software and accessories for industrial cranes and hoists, and we are also the largest independent supplier of digital direct current ("DC") motion control systems for elevators. Customers include most of the industrial crane and hoist companies in North America and the world's leading elevator builders. In addition, we have a growing range of products for energy delivery applications, including motion control systems for mining equipment and power inverters for renewable energy applications. We are focused on providing our customers cost-effective power solutions that will improve efficiency, reduce costs, and save energy. Other trends in our served markets we believe we can capitalize on include the adoption of wireless control solutions, modernization and upgrade of installed equipment, and an increasing desire in our markets for added features, enhanced performance, and safer workplace environments. We believe that with our focus on innovation and our application expertise, combined with strong brand name recognition, broad product offerings and sales channel capabilities, we are well positioned to grow our business by gaining share in both our served markets as well as in new markets. Our operations are located in North America, predominantly in Menomonee Falls, Wisconsin, our Company headquarters.



Our product offerings for material handling applications include innovative power control systems, radio remote controls, and braking, collision-avoidance, and electrification subsystems, sold primarily to original equipment manufacturers ("OEMs") of overhead cranes and hoists. While we sell primarily to OEMs of overhead cranes and hoists, we spend a great deal of effort understanding the needs of end users to gain specification. We can combine our products with engineered services to provide complete customer-specific systems solutions. A primary driver of our growth in this market is our ability to improve our customers' operations and provide them with quantifiable, and in many cases, significant returns on invested capital.

Our product offerings for elevator applications are comprised of highly integrated subsystems and drives used to control motion primarily in high rise, high speed elevator applications. Our products are sold mainly to elevator OEMs and we have a significant share of the available market for DC drives and subsystems used in high-rise 14-------------------------------------------------------------------------------- Table of Contents elevators. We believe we have opportunities for growth in available elevator markets by introducing new energy-saving product offerings for both alternating current ("AC") and DC applications, expanding the breadth of our product offerings for lower performance AC applications, and using our new product offerings to expand geographically.

Our product offerings for energy delivery applications include AC and DC drives for mining applications, as well as power inverters for renewable energy applications. We believe that energy needs will continue to grow significantly for the foreseeable future, and with our product offerings, we are positioned to capitalize on that growth. We have a wide variety of product offerings which are engineered to efficiently use available power, or which convert energy to usable power in an energy efficient manner. We have been a leading supplier of AC and DC digital motion control systems to underground coal mining equipment manufacturers for over 25 years. More recently we've developed and introduced power inverters which convert DC power from renewable energy sources to utility-grade AC power.

We intend to continue to build on our competitive strengths in established material handling, elevator, and mining markets, while also continuing to market our product portfolio aimed at penetrating growing and emerging markets for digital power-based systems. We further intend to continue to pursue internal growth opportunities in our core product lines, seeking to increase our market share, enter new markets, and expand our current business model geographically.

Continuing Operations We focus on a variety of key indicators to monitor our business performance.

These indicators include order rates, sales growth, gross profit margin, operating profit margin, net income, earnings per share, and working capital and cash flow measures. These indicators are compared to our operating plans as well as to our prior year actual results, and are used to measure our success relative to our objectives. Our Company objectives are to grow sales at least 10% on a year-over year basis, to achieve 30% gross margins and 10% operating profit margins, and to generate sufficient cash flow to fund our growth initiatives, our operations and our obligations.

Throughout calendar year 2011, we experienced improving conditions and increasing demand in most of our major served markets, mainly in traditional industrial markets. Accordingly, both our sales and operating results improved steadily throughout 2011, and that trend has continued into fiscal 2012. While our 2012 third quarter sales decreased 8% from the comparable period last year, the majority of the decline was due to lower sales of wind power inverters and products for mining applications. We also recorded an adjustment to our renewable energy sales related to the resolution of order cancellations with our wind customer, which reduced our third quarter sales by $1.4 million. Sales of products with material handling applications, our largest served market, continued to grow in the third quarter of fiscal 2012, and increased nearly 9% over the comparable period last year to more than $21 million.

Our third quarter 2012 gross profit decreased from the comparable period last year, however our gross profit as a percentage of sales increased due mainly to a favorable shift in our sales mix, with higher sales volumes into traditional served industrial markets where margins are typically higher, and lower sales of lower margin products with renewable energy applications. We reported pre-tax income from operations of $1.9 million, or approximately 6.7% of sales, in the third quarter of 2012, compared to prior year pre-tax income from operations of $2.3 million, or 7.7% of sales. The reduction in pre-tax income from operations was mainly due to higher pension expense in the current year. Diluted earnings per share from continuing operations totaled $0.46 per share in the third quarter of 2012, compared to $0.54 per share in the same period of 2011. In addition, our cash balances increased slightly during the third quarter of 2012, even after contributing $3.9 million to our defined benefit pension plan.

Our incoming order rate was strong during the third quarter of fiscal 2012, as demand levels remain healthy in our traditional served industrial markets, mainly for products with material handling applications. While growth in manufacturing activity is moderating, manufacturing continues to be an area of strength in the U.S. economy.

Challenging conditions have persisted in renewable energy markets for some time, and we expect conditions in the wind market to remain soft for the foreseeable future. Renewable energy markets, like many emerging industries, are characterized by rapid changes in technology, market conditions, and available product solutions. Factors influencing end market conditions include the cost of competing traditional energy sources and the availability of government subsidies. Market conditions for inverter manufacturers have deteriorated considerably over the past year. A growing number of competitors combined with high levels of investment in research and development have led to a great deal of pricing pressure and significant reductions in profitability. We also believe that scale is becoming increasingly important in order to compete effectively.

Given the lack of backlog in renewable energy and our expectations regarding future sales levels, we've taken actions to reduce our cost structure in that part of our business, and also 15-------------------------------------------------------------------------------- Table of Contents intend to allocate resources in the future to those areas of our business where we believe we have sustainable competitive advantages and better growth opportunities.

Entering the fourth quarter, we have an order backlog of $18 million, comprised entirely of orders for our traditional served material handling, elevator, and mining markets. We believe we can offset the decline in revenue from renewable energy in the short-term with higher sales of products for material handling applications, and we believe we have numerous near-term and long-term growth opportunities with our radio control products. Sales of our industrial products have higher gross margins than our renewable energy product offerings, and as a result, our sales mix in the third quarter was more favorable than the past several quarters, and we expect that trend to continue in the future.

Longer-term, we believe we can further grow our business beyond our core material handling market by gaining a greater share of the AC elevator controls market, and by reducing our reliance on the coal industry by entering new mining markets, further diversifying our customer base with new products for mining applications beyond coal.

Current forecasts indicate the U.S. economic recovery is slowing, and macro-economic conditions remain dynamic and fragile. As a result, it remains challenging to predict the duration or the magnitude of the current economic recovery, whether in the U.S. overall or in the specific end markets we serve.

For the remainder of 2012, we intend to focus our development and marketing efforts on organic sales growth opportunities in our traditional served markets.

In addition, we are executing actions to prudently expand our reach into new end markets and geographical areas, and are also taking actions to reduce our cost structure and reallocate resources from those parts of our business which are not growing.

Discontinued Operations Certain expenses related to previously divested businesses have been classified as discontinued operations in the accompanying condensed consolidated financial statements and footnotes for all periods presented (see Note 2 of Notes to Condensed Consolidated Financial Statements). Expenses related to previously divested businesses include environmental matters, asbestos claims and product liability claims (see Note 4 of Notes to Condensed Consolidated Financial Statements). All of these issues relate to businesses we no longer own and most relate to indemnification agreements that we entered into when we divested those businesses.

Going forward, our results of discontinued operations may include additional costs incurred related to businesses no longer owned, and may include additional costs above those currently estimated and accrued related to the divestiture of our telecom power systems ("TPS") business, which was divested in September 2008, and our power electronics business, which was divested in October 2006.

Critical Accounting Policies and Estimates There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations", included in our Transition Report on Form 10-K for the six-month transition period ended January 1, 2012.

16-------------------------------------------------------------------------------- Table of Contents Results of Operations - Three Months Ended September 30, 2012, and October 2, 2011 Net Sales and Gross Profit Net sales for the three months ended September 30, 2012, were $26.9 million, a decrease of 8% from the three months ended October 2, 2011, sales of $29.2 million. The decrease in sales was primarily due to lower sales of wind power inverters into renewable energy markets and lower sales of products in mining markets, both of which are included in energy systems in the table below, partially offset by higher sales volumes into traditional served material handling markets. In addition, net sales for the three months ended September 30, 2012, reflect an adjustment to our renewable energy sales related to the resolution of order cancellations with our wind customer, which reduced our sales by $1.4 million. Net sales by major market were as follows, in millions: Three Months Ended September 30, 2012 October 2, 2011 Material handling $ 21.0 78 % $ 19.4 67 % Elevator motion control 6.2 23 % 5.9 20 % Energy systems (0.3 ) (1 )% 3.9 13 % Total net sales $ 26.9 100 % $ 29.2 100 % Gross profit for the three months ended September 30, 2012, was $9.7 million, or 36.0% of sales, versus $9.8 million, or 33.6% of sales, for the three months ended October 2, 2011. The increase in gross profit as a percentage of sales for the three months ended September 30, 2012, as compared to the three months ended October 2, 2011, was mainly due to a favorable shift in the Company's sales mix, with increased sales of higher margin material handling products.

Research and Development, Pension Expense, and Selling, General and Administrative Research and development ("R&D") expense was $1.0 million, or 3.8% of sales, for the three months ended September 30, 2012, comparable to R&D expense of $1.0 million, or 3.5% of sales, for the three months ended October 2, 2011.

Pension expense was $1.7 million and $1.4 million for the three months ended September 30, 2012 and October 2, 2011, respectively (see Note 7 of Notes to Condensed Consolidated Financial Statements). The increase in pension expense was mainly due to increased amortization of actuarial losses resulting from declining interest rates experienced during 2011.

Selling, general and administrative ("SG&A") expense was $5.1 million (18.9% of sales) for the three months ended September 30, 2012, versus $5.2 million (17.7% of sales) for the three months ended October 2, 2011. Selling expenses in the three months ended September 30, 2012, increased to $3.0 million from $2.7 million in the three months ended October 2, 2011, mainly due to higher commissions and higher discretionary spending. General and administrative ("G&A") expense decreased to $2.1 million for the three months ended September 30, 2012, from $2.5 million for the three months ended October 2, 2011, mainly due to lower incentive compensation provisions.

Income from Operations Income from operations for the three months ended September 30, 2012, was $1.9 million compared to income from operations of $2.3 million for the three months ended October 2, 2011. The decrease in income from operations for the three months ended September 30, 2012, as compared to the three months ended October 2, 2011, was mainly due to higher pension expense in the three months ended September 30, 2012.

Interest Income Interest income was negligible for the three months ended September 30, 2012 and October 2, 2011.

17-------------------------------------------------------------------------------- Table of Contents Provision for Income Taxes We recorded a provision for income taxes of $0.2 million and $0.3 million for the three months ended September 30, 2012, and October 2, 2011, respectively. The income tax provision in both periods includes non-cash deferred income tax provisions of $0.2 million related to changes in deferred tax liabilities from goodwill amortization for tax purposes.

Income from Continuing Operations We recorded income from continuing operations of $1.7 million for the three months ended September 30, 2012, or $0.51 per diluted share, compared to income from continuing operations of $2.0 million for the three months ended October 2, 2011, or $0.61 per diluted share.

Loss from Discontinued Operations We recorded a loss from discontinued operations for the three months ended September 30, 2012, of $0.2 million, or a $0.05 loss per share on a diluted basis, compared to a loss from discontinued operations of $0.2 million, or a $0.07 loss per share on a diluted basis, for the three months ended October 2, 2011. The loss from discontinued operations in the three months ended September 30, 2012, and October 2, 2011, is comprised entirely of expenses related to previously divested businesses.

Net Income Our net income was $1.5 million in the three months ended September 30, 2012, or $0.46 per diluted share, compared to net income of $1.7 million in the three months ended October 2, 2011, or $0.54 per share on a diluted basis.

Results of Operations - Nine Months Ended September 30, 2012, and October 2, 2011 Net Sales and Gross Profit Net sales for the nine months ended September 30, 2012, were $84.6 million, a decrease of 4% from the nine months ended October 2, 2011, sales of $88.1 million. The decrease in sales was primarily due to lower sales of wind power inverters into renewable energy markets, which decreased to $3.5 million in the first nine months of fiscal 2012 from $13.1 million in the comparable period last year, most of which was offset by higher sales volumes into traditional served material handling markets. Net sales by major market were as follows, in millions: Nine Months Ended September 30, 2012 October 2, 2011 Material handling $ 58.2 69 % $ 50.9 58 % Elevator motion control 16.7 20 % 17.8 20 % Energy systems 9.7 11 % 19.4 22 % Total net sales $ 84.6 100 % $ 88.1 100 % Gross profit for the nine months ended September 30, 2012, was $30.5 million, or 36.0% of sales, versus $29.0 million, or 32.9% of sales, for the nine months ended October 2, 2011. The increase in gross profit as a percentage of sales for the nine months ended September 30, 2012, as compared to the nine months ended October 2, 2011, was mainly due to a favorable shift in the Company's sales mix, with increased sales of higher margin material handling and fewer sales of lower margin wind power inverters.

Research and Development, Pension Expense, and Selling, General and Administrative R&D expense was $3.0 million, or 3.5% of sales, for the nine months ended September 30, 2012, a decrease compared to R&D expense of $3.3 million, or 3.8% of sales, for the nine months ended October 2, 2011, due mainly to completion of development of the Company's solar inverter product in early 2012.

18-------------------------------------------------------------------------------- Table of Contents Pension expense was $5.0 million and $4.6 million for the nine months ended September 30, 2012 and October 2, 2011, respectively (see Note 7 of Notes to Condensed Consolidated Financial Statements). The increase in pension expense was mainly due to increased amortization of actuarial losses resulting from declining interest rates experienced during 2011.

SG&A expense was $15.6 million (18.4% of sales) for the nine months ended September 30, 2012, comparable to SG&A expense of $15.7 million (17.8% of sales) for the nine months ended October 2, 2011. Selling expenses in the nine months ended September 30, 2012, increased to $8.9 million from $7.6 million in the nine months ended October 2, 2011, mainly due to higher commissions from increased sales of material handling products, higher payroll costs, and higher discretionary spending. G&A expense decreased to $6.7 million for the nine months ended September 30, 2012, from $8.1 million for the nine months ended October 2, 2011, mainly due to lower incentive compensation provisions.

Income from Operations Income from operations for the nine months ended September 30, 2012, was $6.9 million compared to income from operations of $5.4 million for the nine months ended October 2, 2011. The increase in income from operations for the nine months ended September 30, 2012, as compared to the nine months ended October 2, 2011, was mainly due to higher gross profit on increased sales of material handling, and lower R&D and G&A expenses in the nine months ended September 30, 2012, partially offset by increased pension expense and selling expenses.

Interest Income Interest income was negligible for the nine months ended September 30, 2012 and October 2, 2011.

Provision for Income Taxes We recorded a provision for income taxes of $0.8 million and $0.6 million for the nine months ended September 30, 2012, and October 2, 2011, respectively, which includes non-cash deferred income tax provisions of $0.7 million and $0.6 million, respectively, related to changes in deferred tax liabilities from goodwill amortization for tax purposes.

Income from Continuing Operations We recorded income from continuing operations of $6.1 million for the nine months ended September 30, 2012, or $1.87 per diluted share, compared to income from continuing operations of $4.7 million for the nine months ended October 2, 2011, or $1.48 per diluted share.

Income (Loss) from Discontinued Operations We recorded income from discontinued operations for the nine months ended September 30, 2012, of $5.5 million, or $1.68 per share on a diluted basis, compared to a loss from discontinued operations of $0.9 million, or a $0.27 loss per share on a diluted basis, for the nine months ended October 2, 2011. Income from discontinued operations in the nine months ended September 30, 2012, includes a gain of $5.0 million from a settlement agreement resulting in resolution of a legal matter (see Notes 2 and 4 of Notes to Condensed Consolidated Financial Statements). Income from discontinued operations in the nine months ended September 30, 2012, also includes a gain of $1.1 million from non-cash adjustments of liabilities related to previously owned businesses, partially offset by certain legal and other expenses related to previously owned businesses. The loss from discontinued operations in the nine months ended October 2, 2011, is comprised entirely of expenses related to previously divested businesses.

Net Income Our net income was $11.6 million in the nine months ended September 30, 2012, or $3.55 per diluted share, compared to net income of $3.9 million in the nine months ended October 2, 2011, or $1.21 per share on a diluted basis.

Liquidity and Capital Resources Our unrestricted cash and cash equivalent balance increased approximately $6.5 million during the first nine months of fiscal 2012, from $20.6 million at January 1, 2012, to $27.1 million at September 30, 2012. Restricted cash balances remained unchanged during the first nine months of fiscal 2012 at $0.3 million. The primary source of cash during the first nine months of fiscal 2012 was income from continuing operations of $6.1 million, which included 19-------------------------------------------------------------------------------- Table of Contents non-cash charges aggregating $7.0 million for depreciation, amortization, pension, stock compensation, and deferred income tax provisions. In addition, our income from discontinued operations of $5.5 million included receipt of $5.0 million from a settlement agreement entered into during the first nine months of fiscal 2012 to resolve a long-standing legal issue (see Note 4 of Notes to Condensed Consolidated Financial Statements).

The primary uses of cash in the first nine months of fiscal 2012 included $7.7 million in contributions to our pension plan and a $2.8 million net increase in operating assets and liabilities. Accounts receivable increased by $0.5 million during the first nine months of fiscal 2012, due mainly to an increase in days sales outstanding, which increased from 51 days at January 1, 2012, to 58 days at September 30, 2012. Accounts payable and other accrued liabilities decreased by $2.8 million during the first nine months of fiscal 2012, due to lower trade accounts payable balances as well as payment of incentive compensation amounts accrued as of January 1, 2012. In addition, $1.1 million of the reduction in accounts payable and other accrued liabilities resulted from non-cash adjustments to liabilities related to previously owned businesses. We also consumed cash of $0.6 million for disbursements related to previously divested businesses and $0.7 million for capital expenditures.

While we may make further investments to increase capacity and improve efficiency, we do not anticipate that capital expenditures in fiscal 2012 will exceed $1.5 million. The expected amount of capital expenditures could change depending upon changes in revenue levels, our financial condition, and the general economy.

In November 2007 we entered into an agreement with Associated Bank, N.A.

("Associated Bank") providing for a $10 million revolving credit facility (the "revolving facility"). Borrowings under the revolving facility bore interest at the London Interbank Offering Rate ("LIBOR") plus 1.5%, with borrowing levels determined by a borrowing base formula as defined in the agreement, based on the level of eligible accounts receivable. The revolving facility also supports the issuance of letters of credit, places certain restrictions on our ability to pay dividends or make acquisitions, and includes covenants which require minimum operating profit levels and limit annual capital expenditures. Borrowings under the revolving facility were collateralized by our accounts receivable and inventory. We have subsequently entered into four amendments to the revolving facility, the primary purpose of which was to extend the maturity dates of the revolving facility and to broaden the security interest of Associated Bank to include all assets of the Company.

In December 2011, we entered into the most recent fourth amendment to the revolving facility with Associated Bank, the purpose of which was to (i) extend the maturity date of the revolving facility to June 15, 2013; (ii) increase the commitment amount of Associated Bank to $12.5 million; (iii) establish minimum adjusted earnings before interest, taxes, depreciation and amortization requirements for the three-month periods ending December 31, 2011, through March 31, 2013; and (iv) establish maximum cash amounts that we can contribute to our defined benefit pension plan during the term of the agreement. There were no amounts outstanding on the amended revolving facility as of September 30, 2012. We are currently in compliance with all covenants of the revolving facility, as amended.

Primarily as a result of the decline in interest rates over the past decade, the accumulated benefit obligation of our defined benefit pension plan currently exceeds plan assets. We contributed $30 million to our pension plan in December 2006 following the divestiture of our power electronics business, and subsequently have made contributions to the plan aggregating $46 million from April 2008 through September 30, 2012, funded by cash generated from operations and existing cash on hand.

In response to the level of our projected pension funding obligations relative to our current operating cash flows, we filed an application with the Internal Revenue Service ("IRS") in February 2011 for a waiver of our minimum funding requirements (contributions) for the pension plan year 2011. The amount of the funding waiver requested was approximately $17 million, scheduled to be funded in quarterly installments from April 2011 through January 2012, with a final installment due in September 2012. The waiver request was approved by the IRS in October 2011, and as a result, we did not make any contributions to the plan for the pension plan year 2011. Rather, the 2011 plan year required contributions of $17 million will be deferred and amortized with interest at a rate of approximately 6% over plan years 2012 through 2016.

Required quarterly contributions to the pension plan resumed in 2012, and accordingly, we contributed $7.7 million to our pension plan assets in the first nine months of fiscal 2012. In October 2012, subsequent to the end of the third quarter of fiscal 2012, we made the third required quarterly pension contribution of fiscal 2012 in an amount of $3.9 million. We expect to make our final contribution for plan year 2012 in January 2013, also in an amount of $3.9 million.

20-------------------------------------------------------------------------------- Table of Contents In our Transition Report on Form 10-K for the six-month transition period ended January 1, 2012, we disclosed that our estimated minimum contributions to our pension plan for fiscal years 2013 and 2014 aggregated $52 million. Federal legislation signed into law in July 2012 allows pension plan sponsors to use an adjusted 25-year average corporate bond rate versus the current two-year average. Use of the 25-year average rate is expected to result in higher interest rate assumptions in valuing plan liabilities and in determining funding obligations, which in turn will result in lower minimum required contributions for plan sponsors in the near term. As a result of these legislative changes, we now estimate that our fiscal 2013 and 2014 minimum required pension contributions will decrease to $20 million each from the previously expected amount of $26 million for each year. In addition, fiscal 2015 minimum required contributions are currently estimated at $13 million from the previously estimated amount of $20 million. Estimated future contributions to achieve 100% funded status, as measured using current actuarial assumptions and in accordance with the recently enacted legislation, are projected to be approximately $96 million. The net present value of the estimated future contributions, discounted using the post-relief average interest rate of 5.05%, total approximately $77 million.

These estimates and the actual timing and amount of required plan contributions are dependent upon many factors, including returns on invested assets, the level of certain market interest rates, the discount rate used to determine pension obligations, the regulations to be adopted that implement the legislation, and other potential regulatory actions.

Based upon current plans and business conditions, we believe that current cash balances and internally generated cash flows will be sufficient to fund anticipated operational needs, capital expenditures, required pension plan contributions and other commitments over the next 12 months.

Caution Regarding Forward-Looking Statements and Risk Factors This document, including documents incorporated herein by reference, contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "estimate," "anticipate," "intend," "may," "might," "will," "would," "could," "project," and "predict," or similar words and phrases generally identify forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties which in many cases are beyond our control and which cannot be predicted or quantified. As a result, future events and actual results could differ materially from those set forth in, contemplated by, or underlying forward-looking statements. Forward-looking statements contained in this document speak only as of the date of this document or, in the case of any document incorporated by reference from another document, the date of that document. We do not have any obligation to publicly update or revise any forward-looking statement contained or incorporated by reference in these documents to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

Our future results of operations and the other forward-looking statements contained in this filing, including this section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations," involve a number of risks and uncertainties. In particular, the statements regarding future economic conditions, our goals and strategies, new product introductions, penetration of new markets, projections of sales revenues and sales growth, manufacturing costs and operating costs, pricing of our products and raw materials required to manufacture our products, gross margin expectations, relocation and outsourcing of production capacity, capital spending, research and development expenses, the outcome of pending legal proceedings and environmental matters, payment of certain claims by insurance carriers, tax rates, sufficiency of funds to meet our needs including contributions to our defined benefit pension plan, and our plans for future operations, as well as our assumptions relating to the foregoing, are all subject to risks and uncertainties.

A number of factors could cause our actual results to differ materially from our expectations. We are subject to all of the business risks facing public companies, including business cycles and trends in the general economy, financial market conditions, changes in interest rates, demand variations and volatility, potential loss of key personnel, supply chain disruptions, government legislation and regulation, and natural causes. Additional risks and uncertainties include but are not limited to industry conditions, competitive factors such as technology and pricing pressures, business conditions in our served markets, dependence on significant customers, increased material costs, risks and costs associated with acquisitions and divestitures, environmental matters and the risk that our ultimate costs of doing business exceed present estimates. This list of risk factors is not all-inclusive, as other factors and unanticipated events could adversely affect our financial position or results of operations. Further information on factors that could affect our financial results can be found in our Transition Report on Form 10-K filed with the Securities and Exchange 21-------------------------------------------------------------------------------- Table of Contents Commission for the six-month transition period ended January 1, 2012, under the heading "Risk Factors" as well as below in Part II, Item 1A under the heading "Risk Factors".

[ Back To LatinAmerica.tmcnet.com's Homepage 's Homepage ]

comments powered by Disqus




Technology Marketing Corporation

800 Connecticut Ave, 1st Floor East, Norwalk, CT 06854 USA
Ph: 800-243-6002, 203-852-6800
Fx: 203-866-3326

General comments: tmc@tmcnet.com.
Comments about this site: webmaster@tmcnet.com.

STAY CURRENT YOUR WAY

© 2014 Technology Marketing Corporation. All rights reserved | Privacy Policy