Magnetek Provides Update on New York Stock Exchange Issues
October 31 2011 - 8:45AM
Business Wire
Magnetek, Inc. (“Magnetek” or the “Company”) today provided an
update of its ongoing communications with the New York Stock
Exchange (“NYSE”).
Magnetek’s Continued Listing Plan Submitted to the
NYSE
The NYSE notified the Company on October 26, 2011, that it is
reviewing the Company’s proposed plan for continued listing on the
NYSE. The Company had submitted its plan earlier in October 2011
and expects to receive a response from the NYSE within the next
week. The NYSE Listings and Compliance Committee may choose, at its
discretion, to truncate the plan period for regaining compliance
with the NYSE’s continued listing standards from the standard 18
month period, given the Company’s recurrence of having fallen below
the continued listing standards.
As previously disclosed in a press release issued and Form 8-K
filed in September 2011, Magnetek received a notice from the NYSE
that it was considered “below criteria” because the Company’s total
average market capitalization over a consecutive 30-day trading
period and its most recently reported stockholders’ equity each
amounted to less than $50 million.
Below Criteria Notification for Average Share Price
The NYSE further notified the Company on October 26, 2011, that
the Company has fallen below the NYSE’s continued listing standard
relating to the price of its common stock, which requires a minimum
average closing price of $1.00 per share over 30 consecutive
trading days. As of October 20, 2011, the 30 trading-day average
closing price was $0.98.
The Company has a period of six months (the “cure period”) to
bring its average share price back above $1.00. Under the NYSE
rules, the Company’s common stock will continue to be listed on the
NYSE during the cure period, subject to the Company’s compliance
with the other continued listing requirements. The Company plans to
notify the NYSE within 10 days of receipt of the letter that it
intends to cure the deficiency. The Company is not required to
submit a business plan to the NYSE pertaining to the average share
price.
Under the NYSE rules, the Company can demonstrate an accelerated
cure based on a $1.00 share price on both the last trading day of
any calendar month within the cure period and the average share
price over the 30 trading days preceding the end of that month.
Proxy Statement Proposal Authorizing a Reverse Stock
Split
Given the Company’s recurring compliance issues over the past
several years with the NYSE’s continued listing standards related
to the Company’s capitalization, the Company’s most recent
definitive proxy statement, filed on September 19, 2011, included a
proposal for the Company’s shareholders to vote on authorizing a
reverse split of the Company’s common stock.
The proposed reverse stock split is intended to increase the
company’s stock price in order to make the Company eligible for
listing on another national exchange, either the Nasdaq Stock
Exchange (“Nasdaq”) or the NYSE Amex Equities exchange (“Amex”),
either at the Company’s option, or in the event the Company is
ultimately unable to regain compliance with the NYSE’s continued
listing standards. Nasdaq requires a minimum share price of $4.00
and Amex requires a minimum share price of $3.00.
In the event the reverse stock split is not authorized by
shareholders and the Company does not ultimately regain compliance
with the NYSE’s continued listing standards within the prescribed
time frames as outlined above, and if the NYSE commences
proceedings to delist Magnetek, the Company would likely initiate
an orderly transition to the over-the-counter (“OTC”) market.
Important Information
On September 19, 2011, the Company filed with the Securities and
Exchange Commission (“SEC”) a definitive proxy statement and
accompanying material in connection with its annual meeting of
stockholders. Investors and security holders are strongly advised
to read the definitive proxy statement as it contains important
information about the Company and the proposals to be presented at
the annual meeting. Investors and security holders may obtain the
proxy statement and any annual, quarterly and current reports and
other information the company files with the SEC for free at the
SEC’s website at www.sec.gov or at the Company's website at
www.magnetek.com in the “Investor
Relations” section, or by writing to the attention of the Corporate
Secretary of Magnetek, Inc., N49 W13650 Campbell Drive, Menomonee
Falls, Wisconsin 53051. The contents of the websites referenced
herein are not deemed to be incorporated by reference herein or in
the definitive proxy statement.
The Company’s directors and executive officers may be deemed to
be participants in the solicitation of proxies from the Company’s
stockholders for its annual meeting. Information regarding the
interests of such persons is included in the Company’s definitive
proxy statement filed with the SEC on September 19, 2011, which is
available free of charge as described above.
Special Note Regarding Online Availability of Magnetek
Releases and Filings
All Magnetek financial news releases and filings with the SEC
are posted to the Magnetek website. Material and financial releases
as well as SEC filings are available at www.magnetek.com. Automatic
email alerts for these postings are available from the Investor
Relations section of the site. Corporate and general releases as
well as product information are also available at
www.magnetek.com.
Special Note Regarding Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are based on the Company’s
expectations and are subject to risks and uncertainties that cannot
be predicted or quantified and are beyond the Company’s control,
including (1) the potential inability to achieve timely compliance
with the NYSE’s continued listing standards, and (2) the potential
for the Company to be considered below criteria with respect to
other NYSE listing standards. Future events and actual results
could differ materially from those set forth in, contemplated by,
or underlying these forward-looking statements. These include, but
are not limited to, economic conditions in general, business
conditions in material handling, elevator, mining, and alternative
energy markets, operating conditions, competitive factors such as
pricing and technology, risks associated with acquisitions and
divestitures, legal proceedings and the risk that the Company’s
ultimate costs of doing business exceed present estimates. Other
factors that could cause actual results to differ materially from
expectations are described in the Company’s reports filed with the
Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934.