**UNITED STATES SECURITIESAND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

**FORM 10-K**

**(Mark One)**

**x**                              ANNUALREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

**Forthe fiscal year ended July 2, 2006**

**OR**

**o**                                 TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

**Commissionfile number 1-10233**

**MAGNETEK, INC.**

(Exact name of Registrantas specified in its charter)

| **DELAWARE**                                |   | **95-3917584**      |
|---------------------------------------------|--------|---------------------|
| (State or other jurisdiction of             |   | (I.R.S. Employer    |
| incorporation or organization)              |   | Identification No.) |
| **8966 Mason Ave.  Chatsworth, California** |   | **91311**           |
| (Address of Principal Executive Offices)    |   | (Zip Code)          |

 

Registrant’s telephonenumber, including area code: **(818) 727-2216**

Securities registeredpursuant to Section 12(b) of the Act:

| Title of each class              | ** ** | **Name of each  exchange** | ** ** |
|----------------------------------|------------|----------------------------|------------|
| ** **                       | ** ** | **on which  registered**   | ** ** |
| Common Stock,  $.01 par value    |       | New York Stock Exchange    |       |
| Preferred Stock  Purchase Rights |       | New York Stock Exchange    |       |

 

Securities registeredpursuant to Section 12(g) of the Act:       **None**

Indicate by check mark ifthe registrant is a well known seasoned issuer, as defined in Rule 405 of theSecurities Act. Yes o  No x.

Indicate by check mark ifthe registrant is not required to file reports pursuant to Section 13 orSection 15(d) of the Act. Yes o  No x.

Indicate by check markwhether the Registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the Registrant was required tofile such reports), and (2) has been subject to such filing requirementsfor the past 90 days. Yes x  No o

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K isnot contained herein, and will not be contained, to the best of Registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment tothis Form 10-K. o

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer. See definition of “accelerated filer and largeaccelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

 

| Large  accelerated filer o | Accelerated filer x | Non-accelerated filer o |
|----------------------------|---------------------|-------------------------|

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act). o Yes  x No

The aggregate market valueof the voting stock held by non-affiliates of the Registrant, based on theclosing price of $3.25, per share as reported by the New York Stock Exchange,on December 30, 2005 (the last business day of the Company’s most recentlycompleted second fiscal quarter), was $91,340,711. Shares of common stock heldby each executive officer and director have been excluded since such personsmay be deemed affiliates. This determination of affiliate status is notnecessarily a conclusive determination for other purposes.

The number of sharesoutstanding of the Registrant’s Common Stock, as of September 1, 2006 was29,312,512 shares.

**DOCUMENTSINCORPORATED BY REFERENCE**

Portions of the Magnetek, Inc.2006 Annual Report for the fiscal year ended July 2, 2006 are incorporatedby reference into Part II of this Form 10-K. With the exceptionof those portions which are expressly incorporated by reference into this Form 10-K,the Magnetek, Inc. 2006 Annual Report is not deemed filed as part of this Form 10-K.

Portionsof the Magnetek, Inc. definitive Proxy Statement to be filed with theSecurities and Exchange Commission within 120 days after the close of thefiscal year ended July 2, 2006 are incorporated by reference into Part IIIof this Form 10-K.

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**MAGNETEK, INC.ANNUAL REPORT ON FORM 10-KFOR THE FISCAL YEAR ENDED JULY 2, 2006**

|           | ** **                                                                                                          | **Page**   |
|-----------|---------------------------------------------------------------------------------------------------------------------|------------|
|           | **PART I**                                                                                                     | ** ** | ** ** |
| ITEM  1.  | DESCRIPTION  OF BUSINESS                                                                                            | 2          |   |
| ITEM 1A.  | RISK FACTORS                                                                                                        | 7          |   |
| ITEM 1B.  | UNRESOLVED STAFF COMMENTS                                                                                           | 7          |   |
| ITEM 2.   | PROPERTIES                                                                                                          | 7          |   |
| ITEM 3.   | LEGAL PROCEEDINGS                                                                                                   | 7          |   |
| ITEM 4.   | SUBMISSION OF MATTERS TO A  VOTE OF SECURITY HOLDERS                                                                | 8          |   |
|      | PART II                                                                                                        |       |   |
| ITEM  5.  | MARKET  FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER  PURCHASES OF EQUITY SECURITIES | 8          |   |
| ITEM 6.   | SELECTED FINANCIAL DATA                                                                                             | 9          |   |
| ITEM 7.   | MANAGEMENT’S DISCUSSION AND  ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                         | 9          |   |
| ITEM 7A.  | QUANTITATIVE AND QUALITATIVE  DISCLOSURES ABOUT MARKET RISK                                                         | 9          |   |
| ITEM 8.   | FINANCIAL STATEMENTS AND  SUPPLEMENTARY DATA                                                                        | 9          |   |
| ITEM 9.   | CHANGES IN AND DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                               | 9          |   |
| ITEM 9A.  | CONTROLS AND PROCEDURES                                                                                             | 9          |   |
| ITEM 9B   | OTHER INFORMATION                                                                                                   | 11         |   |
|      | PART III                                                                                                       |       |   |
| ITEM  10. | DIRECTORS  AND EXECUTIVE OFFICERS OF THE REGISTRANT                                                                 | 11         |   |
| ITEM 11.  | EXECUTIVE COMPENSATION                                                                                              | 12         |   |
| ITEM 12.  | SECURITY OWNERSHIP OF  CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                     | 12         |   |
| ITEM 13.  | CERTAIN RELATIONSHIPS AND  RELATED TRANSACTIONS                                                                     | 12         |   |
| ITEM 14.  | PRINCIPAL ACCOUNTING FEES  AND SERVICES                                                                             | 12         |   |
|      | PART IV                                                                                                        |       |   |
| ITEM  15  | EXHIBITS  AND FINANCIAL STATEMENT SCHEDULES                                                                         | 12         |   |
|      | SIGNATURES                                                                                                          | 15         |   |

 

The Company uses a 52-53 week fiscal yearwhich ends on the Sunday nearest June 30. Fiscal years 2006 and 2004contained 52 weeks; fiscal year 2005 contained 53 weeks.

 

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**PART I**

**ITEM 1. DESCRIPTIONOF BUSINESS**

**General**

Magnetek, Inc. (“Magnetek”or “the Company”) has been a global provider of digital power products usedprimarily in information technology, telecommunications, consumer products,transportation, industrial automation and energy markets. Magnetek’s productsare sold directly or through manufacturers’ representatives to originalequipment manufacturers (OEMs) for incorporation into their products, to systemintegrators and value-added resellers for assembly and incorporation intoend-user systems, to distributors for resale to OEMs and contractors, and toend-users for repair and replacement purposes. Magnetek operates in a singlesegment, Digital Power Control Systems. The Company was founded in July 1984and is listed on the New York Stock Exchange (NYSE: MAG).

In the fourth quarter offiscal 2006, Magnetek’s management completed a review of various cash raisingalternatives to enable the Company to address certain pending obligations andprovide funds for future growth initiatives. As a result of this review, theCompany entered into an agreement following July 2, 2006 to divest its powerelectronics business, including related assets and liabilities. The powerelectronics business is comprised mainly of Magnetek’s wholly-ownedsubsidiaries, Magnetek S.p.A. (Italy), Magnetek Kft. (Hungary) and MagnetekElectronics Co., Ltd. (China), and a North American division located inChatsworth, California. The power electronics business accounted for $166million, or 69% of the Company’s reported net sales for fiscal year 2005 of$242 million. Upon divestiture of this business, the Company’s remaining operationswill be located primarily in North America and in fiscal 2006 generated salesof approximately $83 million. The divestiture is expected to be completedbefore the end of October 2006. As a result of the divestiture, much of thefollowing description of Magnetek’s business, operations and assets does notinclude the power electronics business and related assets and liabilities. Asdescribed in Management’s Discussion and Analysis of Financial Condition andResults of Operations in the Company’s 2006 Annual Report, in the fourthquarter of fiscal 2006, operations associated with this business werereclassified as discontinued operations and the assets and liabilities of thisbusiness were reclassified as held for sale.

**Digital PowerControl Systems**

*Power-ControlSystems.** *Power-controlsystems is comprised primarily of programmable motion control and powerconditioning systems. The Company is North America’s largest independentsupplier of digital drives, radio controls, software and accessories forindustrial cranes and hoists, and is also the largest independent supplier ofdigital motion control systems for elevators. Customers include most of theindustrial crane and hoist companies in North America and most of the world’sleading elevator builders. Magnetek was the world’s first and is the largestindependent builder of power conditioners for commercial stationary fuel cells,its principal customer being United Technologies. The Company also designs andbuilds digital power inverters for renewable energy sources such as windturbines.

*Backlog.** *Magnetek’s backlog as of the end offiscal 2006 was $9.7 million versus $10.8 million at the end of fiscal2005. The decrease in backlog reflects, primarily, a slowdown in overalleconomic activity. The Company expects most of the orders in its backlog to befilled during first half of fiscal 2007.

*Competition.** *Magnetek’s primary competitorsduring fiscal 2006 included: Control Techniques; KCI/Konecranes, OMRON, Yaskawa,Toshiba, Bubenzer, Johnson Industries, Fronius, SMA, SatCon Technology,Semikron, Telemics and Xantrex. Some of these companies have substantiallygreater financial, marketing and other resources, larger product portfolios andgreater brand recognition than Magnetek.

**CompetitiveStrengths**

Management believes that Magnetek benefits most fromcompetitive advantages in the following areas:

*TechnologicalCapabilities. *Magnetek emphasizes and leveragesits ability to provide custom-designed and customized solutions for powerand motion control applications through digital power-electronictechnology. The Company recruits top talent from universities that stress powerelectronics in their curricula, and its technical personnel possess substantialexpertise in disciplines central to digital power systems and applications. Theseinclude analog-to-digital circuit design, thermal management technology, wirelesscommunication technology, and the application of microprocessors, digitalsignal processors and software algorithms in the development of “smart” power andmotion control systems.

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*CustomerRelationships.** *Magnetekhas established long-term relationships with major manufacturers of fuel cells,cranes and hoists, elevators and mining equipment, among others. The Companybelieves that these relationships have resulted from its reliability andresponsiveness, and readiness to meet special customer requirements based oninnovative technology, the quality and cost-effectiveness of its products, andits commitment to stand behind its products.

*Manufacturingand Systems Integration.** *Magnetek competes as a supplier of high-performance systemsand subsystems that are incorporated into customers’ products, systems andoperations. The Company has taken steps to enhance its competitive position byadopting and implementing ISO process guidelines, implementing demand-flow andcellular manufacturing techniques, and investing in state-of-the-artmanufacturing capabilities and advanced electronic test equipment, to assureproduct quality and reliability.

*ProductBreadth and Market Diversity.** *Magnetek provides a variety ofproducts to each of its major markets. Since product breadth and subsystemsintegration capability are important to certain OEM customers, systemintegrators, dealers, contractors and end-users, these attributes have helped Magnetekestablish OEM relationships and sales channel partnerships. Magnetek alsoaddresses a number of end-markets and serves a range of customers in the beliefthat market diversity and a broad customer base reduce the Company’ssusceptibility to economic cycles and increase its prospects for profitablegrowth.

*Systems Sales Channels.** *Management believes that Magnetek’s well establishednetwork of some 800 “Electromotive SystemsTM” dealers, “Performance Plus”centers and key OEM customers constitute a significant competitive advantage inthe North American materials handling marketplace.

**CompetitiveWeaknesses**

Management considers the Company’s primary competitiveweaknesses to be its limited size and financial resources.

Based upon current plansand business conditions, the Company believes that proceeds from the divestitureof its power electronics business, borrowing capacity under our various creditfacilities, and internally generated cash flows will be sufficient to fundanticipated operational needs, capital expenditures and other near-termcommitments. However, some of the Company’s competitors have substantiallygreater financial resources than Magnetek.

**Restructuring andCurrent Strategy**

Since the mid-1990s, Magnetek has undertaken a seriesof strategic initiatives to tighten its business focus, strengthen itsfinancial position and improve its competitiveness. From 1998 through 2001, anumber of electrical commodity product businesses, representing more than three-quartersof the Company’s revenue, were divested (Motors and Generators in 1999 andStandard Drives, Lighting Ballasts and Component Transformers in 2001). Proceedsfrom these divestitures were applied to eliminate the Company’s long-term debt,repurchase Company stock, and make product-line acquisitions.

Magnetek’s current strategy is centered primarily onraising cash to enable the Company to address pending debt repayment andpension obligations, as well as provide funds for future growth initiatives. Asa result, the Company has decided to divest its power electronics business. TheCompany intends to use the proceeds from the sale of the business to repay debtand fund pension obligations.

In addition, the Companyintends to continue to build on its competitive strengths in establishedmaterial handling, elevator, and mining markets, and to continue to invest inresearch and development to expand the Company’s product portfolio aimed atpenetrating growing and emerging markets for digital power-based systems, suchas alternative energy. Management believes that attractive growth opportunitiesexist in North American alternative energy markets for Magnetek’s power controlsystems, and that attractive growth opportunities may exist in Europe and Asiafor Magnetek’s power control systems that have achieved substantial marketpositions in North America, primarily material handling and elevator systems.

**InternationalOperations**

International sales accounted for 19% of Magnetek’snet revenues in fiscal 2006. The Company defines international sales as salesof products manufactured by its facilities outside the U.S. that are soldoutside of the U.S., as well as sales of products manufactured in the U.S. topurchasers outside of the U.S.

For the Company’s 2006, 2005, and 2004 fiscal years,revenues derived from domestic sales were $67.1 million, $61.3 million and$55.6 million, respectively, and revenues derived from international sales were$16.0 million, $14.7 million and $12.3 million, and the Company continues toexpand sales to global customers.

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The majority of theCompany’s international operations are in Canada. The Company’s continuingoperations hold assets in the U.S., Canada and the United Kingdom totaling$87.2 million, of which $5.7 million are held in Canada and $0.8 million are inthe United Kingdom.

**Suppliers and RawMaterials**

Virtually all materialsand components purchased by the Company are available from multiple suppliers. Duringfiscal 2006, raw materials purchases accounted for approximately 70% of theCompany’s cost of sales. Production of digital power control systems depends onvarious electronic components. The Company seeks to obtain competitive pricingon these raw materials by utilizing multiple suppliers and leveraging itscombined purchasing requirements. Based on analyses of the costs and benefitsof its level of vertical integration, Magnetek is continuing to increase itsoutsourcing of certain materials and component parts that previously have beenproduced internally.

**Research andDevelopment**

Magnetek’s research anddevelopment activities, which are conducted primarily in Menomonee Falls,Wisconsin, are directed toward developing new products, improving existingproducts and customizing or modifying products to meet customers’ specificneeds. Total research and development expenditures were approximately $4.1million, $3.9 million, and $3.1 million respectively, for the Company’s2006, 2005 and 2004 fiscal years.

**IntellectualProperty**

Magnetek holds numerouspatents, trademarks and copyrights, and believes that it holds or licenses allof the patent, trademark, copyright and other intellectual property rightsnecessary to conduct its business. The Company generally relies upon patents,copyrights, trademarks and trade secret laws to establish and maintain itsproprietary rights in its technology and products. There can be no assurancethat any of its patents, trademarks or other intellectual property rights willnot be challenged, invalidated or circumvented, or that any rights grantedthere under will provide competitive advantages to the Company. In addition,there can be no assurance that patents will be issued from pending patentapplications filed by the Company, or that claims allowed on any future patentswill be sufficiently broad to protect Magnetek’s technology. Further, the lawsof some foreign countries may not permit the protection of Magnetek’sproprietary rights to the same extent as do the laws of the United States. Althoughthe Company believes the protection afforded by its patents, patentapplications, trademarks and copyrights has value, rapidly changing technologyin the power control systems industry and shortened product life cycles makeMagnetek’s future success dependent primarily on the innovative skills,technological expertise, research and development and management capabilitiesof its employees rather than on patent, copyright, and trademark protection.

**Employee Relations**

As of September 29,2006, the Company had approximately 200 salaried employees and approximately100 hourly employees, none of whom were covered by collective bargainingagreements with unions. The Company believes that its relationships with itsemployees are favorable.

**AvailableInformation**

The Company’s Internetaddress is www.magnetek.com. The Company’s annual reports on Form 10-K,quarterly reports on Form 10-Q, current reports on Form 8-K and anyamendments to these reports that are filed by the Company with the Securitiesand Exchange Commission (SEC) pursuant to Section 13(a) or 15(d) ofthe Securities Exchange Act of 1934 are available free of charge at or throughthe Company’s website.

**EnvironmentalMatters**

From time to time, Magnetek has taken action to bringcertain facilities associated with previously owned businesses into compliancewith applicable environmental laws and regulations. Upon the subsequent sale ofcertain businesses, the Company agreed to indemnify the buyers againstenvironmental claims associated with the divested operations, subject tocertain conditions and limitations. Remediation activities, including thoserelated to the Company’s indemnification obligations, did not involve materialexpenditures during fiscal years 2006 2005 or 2004.

The Company has also beenidentified by the United States Environmental Protection Agency and certainstate agencies as a potentially responsible party for cleanup costs associatedwith alleged past waste disposal practices at several 

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previouslyowned facilities and offsite locations. Its remediation activities as apotentially responsible party were not material in fiscal years 2006, 2005 and2004. Although the materiality of future expenditures for environmentalactivities may be affected by the level and type of contamination, the extentand nature of cleanup activities required by governmental authorities, thenature of the Company’s alleged connection to the contaminated sites, thenumber and financial resources of other potentially responsible parties, theavailability of indemnification rights against third parties and theidentification of additional contaminated sites, the Company’s estimated shareof liability, if any, for environmental remediation, including itsindemnification obligations, is not expected to be material.

*Century Electric(McMinnville, Tennessee)*

Prior to the Company’spurchase of Century Electric, Inc. (“Century Electric”) in 1986, CenturyElectric acquired a business from Gould Inc. (“Gould”) in May 1983that included a leasehold interest in a fractional horsepower electric motormanufacturing facility located in McMinnville, Tennessee. Gould agreed toindemnify Century Electric from and against liabilities and expenses arisingout of the handling and cleanup of certain waste materials, including but notlimited to cleaning up any polychlorinated biphenyls (“PCBs”) at theMcMinnville facility (the “1983 Indemnity”). The presence of PCBs and othersubstances, including solvents, in the soil and in the groundwater underlyingthe facility and in certain offsite soil, sediment and biota samples has beenidentified. The McMinnville plant is listed as a Tennessee Inactive HazardousWaste Substance Site and plant employees were notified of the presence ofcontaminants at the facility. Gould has completed an interim remedialexcavation and disposal of onsite soil containing PCBs and a preliminaryinvestigation and cleanup of certain onsite and offsite contamination. TheCompany believes the cost of further investigation and remediation (includingancillary costs) are covered by the 1983 Indemnity. The Company sold itsleasehold interest in the McMinnville plant in August 1999 and while theCompany believes that Gould will continue to perform substantially under itsindemnity obligations, Gould’s substantial failure to perform such obligationscould have a material adverse effect on the Company’s financial position, cashflows and results of operations.

*Effect of Fruit ofthe Loom Bankruptcy (Bridgeport, Connecticut)*

In 1986, the Company acquired the stock of UniversalManufacturing Company (“Universal”) from a predecessor of Fruit of the Loom (“FOL”),and the predecessor agreed to indemnify the Company against certainenvironmental liabilities arising from pre-acquisition activities at a facilityin Bridgeport, Connecticut. Environmental liabilities covered by theindemnification agreement include completion of additional cleanup activities,if any, at the Bridgeport facility (sold in connection with the sale of thetransformer business in June 2001) and defense and indemnification againstliability for potential response costs related to offsite disposal locations.FOL, the successor to Universal’s indemnification obligation, filed a petitionfor Reorganization under Chapter 11 of the Bankruptcy Code in 1999 and theCompany filed a proof of claim in the proceeding for obligations related to theenvironmental indemnification agreement. The Company believes that FOL hadsubstantially completed the clean-up obligations required by theindemnification agreement prior to the bankruptcy filing. In November 2001,the Company and FOL entered into an agreement involving the allocation ofcertain potential tax credits and Magnetek withdrew its claims in thebankruptcy proceeding. FOL’s obligation to the state of Connecticut was notdischarged in the reorganization proceeding. FOL’s inability to satisfy itsremaining obligations related to the Bridgeport facility and any offsitedisposal locations, or the discovery of additional environmental contaminationat the Bridgeport facility could have a material adverse effect on the Company’sfinancial position or results of operations.

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**SupplementalInformation-Executive Officers of the Company**

Thefollowing table sets forth certain information regarding the current executiveofficers of the Company.

| **Name**               | ** ** | ** ** | *** *** | **Age** | ** ** | **Position**                                             | ** ** | ** ** | ** ** |
|------------------------|------------|------------|--------------|---------|------------|----------------------------------------------------------|------------|------------|------------|
| Andrew G. Galef        |       |       | 73           |    |       | Chairman of the Board                                    |       |
| Thomas G. Boren        |       |       | 57           |    |       | President and Chief  Executive Officer                   |       |
| Antonio Canova, Ph.D   |       |       | 64           |    |       | Executive Vice  President, Power Electronic Products     |       |
| Alexander Levran, Ph.D |       |       | 56           |    |       | Executive Vice  President, Chief Technology Officer      |       |
| Peter M. McCormick     |       |       | 46           |    |       | Executive Vice President,  Power Control Systems         |       |
| David P. Reiland       |       |       | 52           |    |       | Executive Vice President  and Chief Financial Officer    |       |
| Stephen Torres         |       |       | 41           |    |       | Executive Vice  President, Alternative Energy            |       |
| Tina D. McKnight       |       |       | 48           |    |       | Vice President, General  Counsel and Secretary           |       |
| Marty J. Schwenner     |       |       | 45           |    |       | Vice President, Controller and Chief Accounting  Officer |       |

 

Andrew Galef has been theChairman of the Board of Directors since July 1984 and served as thePresident and Chief Executive Officer of Magnetek from September 1993until June 1996 and from May 1999 until May 2005, when hevoluntarily resigned his position, at which time he ceased to be an executiveofficer of the Company. Mr. Galef has been President of The SpectrumGroup, Inc., a private investment and management firm, since itsincorporation in California in 1978 and has served as Chairman and ChiefExecutive Officer of the Spectrum Group since 1987.

Thomas Boren has served onthe Company’s Board of Directors since 1997 and has served as the Company’sPresident and Chief Executive Officer since May 9, 2005. Mr. Borenhas held executive positions in the energy products and services sector since1980, most recently as Executive Vice President of PG&E Corporation, and asPresident and Chief Executive Officer of PG&E’s National Energy Group fromAugust 1999 until December 2002. Prior to joining PG&E Corporation, Mr. Borenwas an Executive Vice President with Southern Company and served as Presidentand CEO of Southern Energy Inc., Southern Company’s worldwide power plant,energy trading, and energy services businesses.

Antonio Canova is theExecutive Vice President responsible for the Company’s Power ElectronicProducts Group in Europe and North America. Dr. Canova joined Magnetekwhen it acquired Plessey S.p.A. in 1991 and assumed responsibility for theCompany’s European power components business at that time. With the acquisitionof Omega Power Systems, Inc. in 1998, Dr. Canova assumedresponsibility for the North American power components business as well. Priorto joining Magnetek, Dr. Canova was the Managing Director of PlesseyS.p.A. from 1988 until its acquisition by Magnetek in 1991 and served as itsGeneral Manager from 1969 to 1988.

Alexander Levran isExecutive Vice President and Chief Technology Officer of the Company. Dr. Levranjoined the Company in July 1993 as its Vice President, Technology afterserving as Vice President of Engineering and Technology for EPE Technologies, Inc.,a subsidiary of Groupe Schneider, from 1991 until 1993. From 1981 until 1991, Dr. Levranheld various engineering management positions with Teledyne Inet, a subsidiaryof Teledyne, Inc., most recently as Vice President of Engineering.

Peter McCormick is theExecutive Vice President responsible for the Company’s Power Systems Group(formerly the Industrial Controls Group and the Telecom Power Group). Mr. McCormickhas had primary responsibility for the Company’s Industrial Controls Group (nowpart of the Power Systems Group) since 2002. Prior to that, he served as thePresident of Industrial Controls from 1999 until 2002. Since joining theCompany in 1996, Mr. McCormick has also served as the Vice President ofOperations for the drives group from 1998 until 1999 and as Vice President ofthe custom products business group from 1996 until 1998.

David Reiland is anExecutive Vice President of the Company and has been its Chief FinancialOfficer since 1988. In 2003, Mr. Reiland assumed temporary responsibilityfor the Company’s Telecom Power Group during a management restructure. Mr. Reilandhas also served as the Controller of the Company from 1986 until 1993 and asVice President, Finance from 1987 to 1989. Before joining Magnetek, Mr. Reilandwas an Audit Manager with Arthur Andersen & Co. where he served invarious capacities since 1980. Mr. Reiland is a Certified PublicAccountant.

Stephen Torres is theExecutive Vice President responsible for the Alternative Energy business. Mr.Torresjoined the Company in April, 2005 after serving for four years as the VicePresident responsible for marketing and project development for FuelCell Energy, Inc.Before that, Mr. Torres was director of business development, channelmanagement and Latin America marketing for Capstone Turbine Corporation. Priorto joining Capstone, Mr. Torres was Manager, Manufacturing Practice, withDeloitte Consulting Group for five years, where he focused on marketing, supplychain processes and operations improvement. Before joining Deloitte ConsultingGroup, he served in brand management and technical sales with Procter &Gamble and General Electric.

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Tina McKnight joined theCompany in September 2000 as Vice President, General Counsel andSecretary. Prior to joining Magnetek, Ms. McKnight was Vice President andAssistant General Counsel of creditcards.com from 1999 to 2000 and Vice President,Senior Counsel and Assistant Secretary of Great Western Bank from 1990 to 1999.Ms. McKnight was an attorney with the law firms of Brobeck, Phleger &Harrison in Los Angeles, California from 1987 until 1990 and with Peterson,Ross, Schloerb & Seidel in Los Angeles, California from 1985 until1987.

Marty Schwenner has been aVice President of the Company since 2003 and Controller since 2002. Mr. Schwennerwas Vice President of Finance for the Power Electronic Group from 1998 until2002. Mr. Schwenner also served as the Chief Financial Officer of theCompany’s European Operations from 1992 to 1998 and as Internal Audit Managerfrom 1991 until 1992. Mr. Schwenner joined Magnetek as an Internal Auditorin 1989. Before joining Magnetek, Mr. Schwenner was a Financial Analystwith Nortek, Inc. since 1985. Mr. Schwenner is a Certified PublicAccountant and a Certified Internal Auditor.

**ITEM1A. RISK FACTORS**

The information called forby this Item 1A is hereby incorporated by reference to the section of the Company’s2006 Annual Report entitled “Risk Factors Affecting the Company’s Outlook.”

**ITEM1B. UNRESOLVED STAFF COMMENTS**

Not applicable.

**ITEM2. PROPERTIES**

Magnetek’sheadquarters and each of its manufacturing facilities for the continuingoperations of the Company are listed below, each of which is leased. 

| **Location**                | ** ** | **Lease Term** | ** ** | **Approximate  Size (Sq.Ft.)** | ** ** | **Principal Use** | ** **                           |
|-----------------------------|------------|---------------------|------------|-------------------------------------|------------|------------------------|--------------------------------------|
| Menomonee Falls,  Wisconsin |       | 2009                |       |                                | 84,000     |                   | Power control systems manufacturing  |   |
| Mississauga, Canada         |       | 2006                |       |                                | 18,000     |                   | Power control systems manufacturing  |   |
| Pittsburgh, Pennsylvania    |       | 2009                |       |                                | 9,000      |                   | Power control  systems manufacturing |   |

 

The Company believes itsfacilities are in satisfactory condition and are adequate for its continuingoperations.

**ITEM3. LEGAL PROCEEDINGS**

**Litigation—Product Liability**

The Company has settled orotherwise resolved all of the product liability lawsuits associated with itsdiscontinued business operations. The last remaining limited obligation todefend and indemnify the purchaser of a discontinued business operation againstnew product liability claims expired in December 2003 and the Companybelieves that any new claims would either qualify as an assumed liability, asdefined in the various purchase agreements, or would be barred by an applicablestatute of limitations. The Company is also a named party in two productliability lawsuits related to the Telemotive Industrial Controls businessacquired in December 2002 through the purchase of the stock of MXTHoldings, Inc. Both claims were tendered to the insurance companies thatprovided coverage for MXT Holdings, Inc., against such claims and thedefense and indemnification has been accepted by the carriers, subject to areservation of rights. Management believes that the insurers will bear allliability, if any, with respect to both cases and that the proceedings,individually or in the aggregate, will not have a material adverse effect onthe Company’s results of operations or financial position.

In August 2006,Pamela L. Carney, Administrator of the Estate of Michael J. Carney, filed alawsuit in the Court of Common Pleas of Westmoreland County, Pennsylvania,against the Company and other defendants, alleging that a product manufacturedby the Telemotive Industrial Controls business acquired by the Company in December 2002contributed to an accident that resulted in the death of Michael J. Carney in August 2004.The claim has been tendered to the Company’s insurance carrier and legalcounsel has been retained to represent the Company. Plaintiff’s claim fordamages is unknown at this time, but management believes that its insurer willbear all liability for the claim, if any.

The Company has beennamed, along with multiple other defendants, in asbestos-related lawsuitsassociated with business operations previously acquired by the Company, butwhich are no longer owned. During the Company’s ownership, none of thebusinesses produced or sold asbestos-containing products. With respect tothese claims, the Company is either contractually indemnified against liabilityfor asbestos-related claims or believes that it has no liability for suchclaims. The Company aggressively seeks dismissal from these proceedings, andhas also tendered the defense of these cases to the 

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insurersof the previously acquired businesses and is awaiting their response. TheCompany has also filed a late claim in the amount of $2.5 million in theFederal-Mogul bankruptcy proceedings to recover attorney’s fee paid for thedefense of these claims, which the Company believes is an obligation of FederalMogul although the claim is subject to challenge. Management does not believethe asbestos proceedings, individually or in the aggregate, will have amaterial adverse effect on its financial position or results of operations.

**Litigation—Patent Infringement**

In April 1998, Ole K.Nilssen filed a lawsuit in the U.S. District Court for the Northern District ofIllinois alleging infringement by the Company of seven of his patentspertaining to electronic ballast technology, and seeking unspecified damagesand injunctive relief to preclude the Company from making, using or sellingproducts allegedly infringing his patents. The Company denied that its productsinfringed any valid patent and filed a response asserting affirmative defenses,as well as a counterclaim for a judicial declaration that its products do notinfringe the patents asserted by Mr. Nilssen and also that the assertedpatents are invalid. In June 2001, the Company sold its lighting businessto Universal Lighting Technologies, Inc. (“ULT”), and agreed to provide alimited indemnification against certain claims of infringement that Nilssenmight allege against ULT. In April 2003, Nilssen’s lawsuit and thecounterclaims were dismissed with prejudice and both parties agreed to submitlimited issues in dispute to binding arbitration before an arbitrator with arelevant technical background. The arbitration occurred in November, 2004 and adecision awarding Nilssen $23.4 million was issued on May 3, 2005, to bepaid within ten days of the award. Nilssen’s counsel filed a motion to enterthe award in U.S. District Court for the Northern District of Illinois, andMagnetek filed a counter-motion to vacate the award for a number of reasons,including that the award was fraudulently obtained. Magnetek’s request for oralargument was granted and the hearing took place on October 19, 2005. Adecision has not been announced. An unfavorable decision by the Court wouldlikely result in payment of the award to Nilssen.

In February 2003,Nilssen filed a second lawsuit in the U.S. District Court for the NorthernDistrict of Illinois alleging infringement by ULT of twenty-nine of his patentspertaining to electronic ballast technology, and seeking unspecified damagesand injunctive relief to preclude ULT from making, using or selling productsallegedly infringing his patents. ULT made a claim for indemnification, whichthe Company accepted, subject to the limitations set forth in the saleagreement. The case is now pending in the Central District of Tennessee. Nilssenvoluntarily dismissed all but four of the patents from the lawsuit. The Companydenies that the products for which it has an indemnification obligation to ULTinfringe any valid patent and responded on behalf of ULT asserting affirmativedefenses, as well as a counterclaim for a judicial declaration that the patentsare unenforceable and invalid and that the products do not infringe Nilssen’spatents. ULT requested a re-examination of the patents at issue by thePatent and Trademark Office and the request was granted. Meanwhile, the caseagainst ULT has been stayed pending Nilssen’s appeal of an unfavorable decisionagainst him in another case that could influence the outcome of his lawsuitsagainst ULT. The Company will continue to aggressively defend the claimsagainst ULT that are subject to defense and indemnification; however, anunfavorable decision could have a material adverse effect on the Company’sfinancial position, cash flows and results of operations.

**ITEM4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

No matters were submittedto the stockholders of the Company during the quarter ended July 2, 2006.

**PART II**

**ITEM5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES**

Thefollowing table sets forth the high and low sales prices of the Company’sCommon Stock during each quarter of fiscal 2006 and 2005:

| ** **            | ** ** | **High**   | ** ** | **Low**    | ** ** |
|-----------------------|------------|------------|------------|------------|------------|
| **Fiscal Year 2006**  | ** ** | ** ** | ** ** | ** ** | ** ** |
| First quarter         |       | $          | 3.70       |       | $          | 2.37 |   |
| Second quarter        |       | 3.50       |       | 2.37       |       |
| Third quarter         |       | 4.10       |       | 3.03       |       |
| Fourth quarter        |       | 4.19       |       | 2.01       |       |
| **Fiscal Year  2005** |       |       |       |       |       |
| First quarter         |       | $          | 8.40       |       | $          | 5.26 |   |
| Second quarter        |       | 7.87       |       | 5.97       |       |
| Third quarter         |       | 6.94       |       | 4.50       |       |
| Fourth quarter        |       | 5.40       |       | 1.90       |       |

 

8

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The Company’s Common Stock is listed for trading onthe New York Stock Exchange under the ticker symbol “MAG.” As of September 1,2006 there were 198 record holders of Magnetek’s Common Stock.

Magnetek has not paid any cash dividends on its CommonStock and does not anticipate paying cash dividends in the near future. Theability of the Company to pay dividends on its Common Stock is restricted byprovisions in the Company’s 2006 bank loan agreement, which provides that theCompany may not declare or pay any dividend or make any distribution withrespect to its capital stock.

The Company did notrepurchase any of its Common Stock during fiscal year 2006.

**ITEM 6. SELECTEDFINANCIAL DATA**

The information called forby this Item 6 is hereby incorporated by reference to the section of theCompany’s 2006 Annual Report entitled “Selected Financial Data.”

**ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS**

The information called forby this Item 7 is hereby incorporated by reference to the section of theCompany’s 2006 Annual Report entitled “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations.”

**ITEM 7A. QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

The information called forby this Item 7A is hereby incorporated by reference to the section of theCompany’s 2006 Annual Report entitled “Quantitative and Qualitative DisclosuresAbout Market Risk.”

**ITEM 8. FINANCIALSTATEMENTS AND SUPPLEMENTARY DATA**

The information called forby this Item 8 is hereby incorporated by reference to the Company’sConsolidated Financial Statements and the corresponding Report of IndependentRegistered Public Accounting Firm in the Company’s 2006 Annual Report.

**ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTSON ACCOUNTING AND FINANCIALDISCLOSURE**

Magnetek had nodisagreements with its independent accountants in fiscal 2006 with respect toaccounting and financial disclosure, and has not changed its independentaccountants during the two most recent fiscal years.

**ITEM 9A. CONTROLSAND PROCEDURES**

**(a) Explanationof Disclosure Controls and Procedures**

Management, under thesupervision of and with the participation of our Chief Executive Officer andChief Financial Officer, has evaluated the effectiveness of our disclosurecontrols and procedures, as such term is defined in Rules 13a-15(e) underthe Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of theend of the period covered by this Annual Report on Form 10-K. Basedon such evaluation and because of the material weakness identified below, ourChief Executive Officer and Chief Financial Officer have concluded that ourdisclosure controls and procedures were not effective as of the end of July 2,2006.

**(b) Management’sAnnual Report on Internal Control Over Financial Reporting**

Management isresponsible for establishing and maintaining adequate internal control overfinancial reporting as defined in Exchange Act Rules 13a-15(f) and15d-15(f). Internal control over financial control is a process designedto provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements in accordance withaccounting principles generally accepted in the United States of America. TheCompany’s internal control over financial reporting includes those policies andprocedures that:

   I.          Pertainto the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of assets of the Company;

 II.           Providereasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with accounting principlesgenerally accepted in the United States of America, and 

9

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that the receipts and expenditures of the Company are being made onlyin accordance with authorizations of management and directors of the Company;and

III.         Provide reasonableassurance regarding the prevention or timely detection of unauthorizedacquisition, use or disposition of the Company’s assets that could have amaterial effect on the financial statements.

Because of inherent limitations, internal control overfinancial reporting, no matter how well designed, may not prevent or detectmisstatements. Therefore, even effective internal control over financialreporting can only provide reasonable assurance with respect to the reliabilityof financial reporting and the preparation and presentation of financialstatements. Also, projections of any evaluation about the effectiveness ofinternal control over financial reporting to future periods are subject to therisk that controls may become inadequate due to changes in conditions, or thatthe degree of compliance with the policies or procedures may deteriorate.

Management evaluated the effectiveness of the Company’sinternal control over financial reporting as of July 2, 2006. In makingthis evaluation, management used the criteria set forth in *Internal Control-Integrated Framework*issued by the Committee of Sponsoring Organizations of the Treadway Commission(COSO).

A material weakness is a control deficiency, orcombination of control deficiencies, that results in more than a remotelikelihood that a material misstatement of the annual or interim financialstatements will not be prevented or detected. As of July 2, 2006,management has concluded that the organizational structure of the Company’sEuropean subsidiary, Magnetek S.p.A., lacks adequate levels of personnel totimely perform certain critical accounting activities, including the review andapproval of accounting adjustments and account reconciliations. Management hasconcluded that this control deficiency constitutes a material weakness. As aresult of the material weakness noted, management has concluded that theCompany did not maintain effective control over financial reporting as of July 2,2006 based on the criteria set forth in *InternalControl-Integrated Framework* issued by the COSO. This Europeansubsidiary is being divested as part of the Company’s power electronicsbusiness, as described elsewhere in this Report on Form 10-K.

Management’s evaluation ofthe effectiveness of internal control over financial reporting as of July 2,2006, has been audited by Ernst & Young LLP, an independent registeredpublic accounting firm, as stated in their report which is included herein.

**(c) Changes inControls and Procedures**

No change in internalcontrol over financial reporting occurred during the period ended July 2,2006, that has materially affected, or is reasonably likely to materiallyaffect, such internal control over financial reporting

**REPORT OFINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

The Board of Directors and StockholdersMagnetek, Inc.

We have audited management’s assessment, included inthe accompanying Management’s Annual Report on Internal Control Over FinancialReporting, that Magnetek, Inc. did not maintain effective internal controlover financial reporting as of July 2, 2006, because of the effect of amaterial weakness identified in management’s assessment as described below, basedon criteria established in InternalControl—Integrated Framework issued by the Committee of SponsoringOrganizations of the Treadway Commission (the COSO criteria). Magnetek, Inc.’smanagement is responsible for maintaining effective internal control overfinancial reporting and for its assessment of the effectiveness of internalcontrol over financial reporting. Our responsibility is to express an opinionon management’s assessment and an opinion on the effectiveness of the company’sinternal control over financial reporting based on our audit.

We conducted our audit in accordance with thestandards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting wasmaintained in all material respects. Our audit included obtaining anunderstanding of internal control over financial reporting, evaluatingmanagement’s assessment, testing and evaluating the design and operatingeffectiveness of internal control, and performing such other procedures as weconsidered necessary in the circumstances. We believe that our audit provides areasonable basis for our opinion.

A company’s internal control over financial reportingis a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles. A company’sinternal control over financial reporting includes those policies andprocedures that (1) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect the 

10

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transactions anddispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accountingprinciples, and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition, use, or disposition of the company’sassets that could have a material effect on the financial statements.

Because of its inherent limitations, internal controlover financial reporting may not prevent or detect misstatements. Also,projections of any evaluation of effectiveness to future periods are subject tothe risk that controls may become inadequate because of changes inconditions, or that the degree of compliance with the policies or procedures maydeteriorate.

A material weakness is a control deficiency, orcombination of control deficiencies, that results in more than a remotelikelihood that a material misstatement of the annual or interim financialstatements will not be prevented or detected. The following material weaknesshas been identified and included in management’s assessment. The organizationalstructure of the Company’s European subsidiary, Magnetek S.p.A., lacks adequatelevels of personnel to timely perform certain critical accounting activities,including the review and approval of accounting adjustments and accountreconciliations. This material weakness affected several financial statementaccounts, including inventory, cost of sales, deferred income taxes, andprovision for income taxes and resulted in adjustments to the consolidatedfinancial statements. This material weakness was considered in determining thenature, timing, and extent of audit tests applied in our audit of the July 2,2006 consolidated financial statements, and this report does not affect ourreport dated September 28, 2006 on those financial statements.

In ouropinion, management’s assessment that Magnetek, Inc. did not maintaineffective internal control over financial reporting as of July 2, 2006, isfairly stated, in all material respects, based on the COSO control criteria.Also, in our opinion, because of the effect of the material weakness describedabove on the achievement of the objectives of the control criteria, Magnetek, Inc.has not maintained effective internal control over financial reporting as of July 2,2006, based on the COSO control criteria.

|                             | /s/  Ernst & Young LLP |   |
|-----------------------------|---------------------------------|--------|
| Woodland Hills,  California |                            |
| September 28,  2006    |                            |

 

**ITEM 9B. OTHERINFORMATION**

No other information isrequired to be reported for matters not disclosed on Form 8-K duringthe period ended July 2, 2006.

**PART III**

**ITEM 10. DIRECTORSAND EXECUTIVE OFFICERS OF THE REGISTRANT**

The information regarding the Company’s directorscalled for by this Item 10 is hereby incorporated by reference to thesections of the Company’s 2006 Proxy Statement entitled “Proposal No. 1 –Election of Board of Directors” and “Section 16(a) BeneficialOwnership Reporting Compliance”.

The information regardingthe Company’s executive officers required by this item is included in Part I,Item 1, under the caption “Supplementary Information – Executive Officers ofthe Company” and is hereby incorporated by reference into this section.

**SupplementalInformation-Code of Ethics**

The Company has adopted aCode of Ethics for all of its directors and employees that contains portionsspecifically applicable to executives and officers of the Company, includingthe Chief Executive Officer, the Chief Financial Officer, the Controller andemployees performing financial functions for individual business units of theCompany. The Code of Ethics is posted on Magnetek’s website atwww.magnetek.com. A copy of the Code of Ethics is available, without charge, toany shareholder who sends a written request to the Corporate Secretary at 8966Mason Ave., Chatsworth, California 91311.

11

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**ITEM 11. EXECUTIVECOMPENSATION**

The information called forby this Item 11 is hereby incorporated by reference to the section of theCompany’s 2006 Proxy Statement entitled “Executive Compensation”.

**ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIALOWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**

**Security Ownershipof Certain Beneficial Owners and Management**

The information called forby this Item 12 is hereby incorporated by reference to the sections of theCompany’s 2006 Proxy Statement entitled “Beneficial Ownership of Magnetek, Inc.Common Stock by Directors, Officers and Certain Other Officers” and “SecuritiesAuthorized For Issuance Under Equity Compensation Plans”.

**ITEM 13. CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS**

The information requiredby this Item 13 is hereby incorporated by reference to the sections of theCompany’s 2006 Proxy Statement entitled “Relationships and Related Transactions”and “Compensation Committee Interlocks and Insider Participation”.

**ITEM 14. PRINCIPALACCOUNTING FEES AND SERVICES**

The information called forby this Item 14 is hereby incorporated by reference to the section of theCompany’s 2006 Proxy Statement entitled “Proposal No. 2 – Ratification of theAppointment of Independent Registered Public Accountants Firm”.

**PART IV**

**ITEM 15. EXHIBITSAND FINANCIAL STATEMENT SCHEDULES**

**(a) Index to Consolidated Financial Statements,Consolidated Financial Statement Schedules and Exhibits:**

|        | ** **                                                                                                                          | ** ** | **Annual Report to  Stockholders Page** | ** ** |
|--------|-------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------|------------|
| **1.** | **Consolidated Financial Statements**                                                                                               |       |                                    |       |
|   | Consolidated Statements  of Operations for Years Ended July 2, 2006, July 3, 2005, and  June 27, 2004                |       | 17                                      |       |
|   | Consolidated Balance  Sheets at July 2, 2006 and July 3, 2005                                                             |       | 18                                      |       |
|   | Consolidated Statements  of Stockholders’ Equity for Years Ended July 2, 2006, July 3, 2005,  and June 27, 2004 |       | 19                                      |       |
|   | Consolidated Statements  of Cash Flows for Years Ended July 2, 2006, July 3, 2005, and  June 27, 2004                |       | 20                                      |       |
|   | Notes to Consolidated  Financial Statements                                                                                         |       | 21                                      |       |
|   | Report of Independent  Registered Public Accounting Firm                                                                            |       | 42                                      |       |
| **2.** | **Consolidated Financial  Statement Schedule**                                                                                      |       |                                    |       |
|   | Schedule II—Valuation  and Qualifying Accounts                                                                                 |       | 58                                      |       |
|   | Report of Independent  Registered Public Accounting Firm                                                                            |       | 60                                      |       |

 

All other financialstatement schedules have been omitted because of the absence of conditionsunder which they are required or applicable, or because the informationrequired is included in the Consolidated Financial Statements and relatednotes.

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**3. Exhibit Index**

Thefollowing exhibits are filed as part of this Annual Report Form 10-K,or are incorporated herein by reference. Where an exhibit is incorporated byreference, the number which precedes the description of the exhibit indicatesthe documents to which the cross-reference is made.

| Exhibit | ** ** | ** **                                                                                                                                                                        |
|---------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **No.** | **Note**   | **Description of Exhibit**                                                                                                                                                        |
| 3.1     | (1)        | Restated Certificate of Incorporation of the  Company, as filed with the Delaware Secretary of State on November 21,  1989.                                                  |
| 3.2     | (2)        | By-laws of the Company, as amended and restated.                                                                                                                                  |
| 4.1     | (3)        | Registration Rights Agreement dated as of  April 29, 1991 among the Company, Andrew G. Galef, Frank Perna, Jr.  and the other entities named therein.                   |
| 4.2     | (4)        | Registration Rights Agreement dated as of June 28,  1996 by and between the Company and U.S. Trust Company of California, N.A..                                              |
| 4.3     | (21)       | Registration Rights Agreement dated as of  June 26, 2002 by and between the Company and U. S. Trust Company N.A                                                              |
| 4.4     | (10)       | Rights Agreement dated as of April 30, 2003 between  the Company and The Bank of New York, as Rights Agent.                                                                  |
| 4.5     | (21)       | Agreement for Registration of Rights dated as of  September 15, 2003 between the Company and SEI Private Trust Company.                                                      |
| 4.6     | (26)       | Registration Rights Agreement dated as of  October 3, 2003 between the Company and each B. Riley Investor.                                                                   |
| 10.1    | (6)        | Second Amended and Restated 1989 Incentive Stock  Compensation Plan of Magnetek, Inc. (“1989 Plan”).                                                               |
| 10.2    | (4)        | Amendment No. 1 to 1989 Plan.                                                                                                                                                |
| 10.3    | (4)        | Standard Terms and Conditions Relating to Non-Qualified  Stock Options, revised as of July 24, 1996, pertaining to the 1989 Plan.                                            |
| 10.4    | (4)        | Form of Non-Qualified Stock Option Agreement  Pursuant to the Second Amended and Restated 1989 Incentive Stock Compensation  Plan of the Company.                            |
| 10.5    | (7)        | Magnetek, Inc. 1997 Non-Employee Director Stock  Option Plan (the “DSOP”).                                                                                         |
| 10.6    | (8)        | First Amendment to the DSOP dated as of  July 26, 2000.                                                                                                                      |
| 10.7    | (5)        | 1991 Discretionary Director Incentive Compensation  Plan of the Company.                                                                                                          |
| 10.8    | (9)        | 1999 Stock Incentive Plan of the Company (the “1999  Plan”).                                                                                                            |
| 10.9    | (9)        | 2000 Employee Stock Plan of the Company (the “2000  Plan”).                                                                                                             |
| 10.10   | (9)        | Standard Terms and Conditions Relating to  Non-Qualified Stock Options, effective as of October 19, 1999,  pertaining to the 1999 Plan and the 2000 Plan.                    |
| 10.11   | (11)       | Magnetek, Inc. Amended and Restated Director  Compensation and Deferral Investment Plan (the “DDIP”).                                                              |
| 10.12   | (22)       | Amendment to the DDIP dated April 17, 2002.                                                                                                                                  |
| 10.13   | (12)       | Non-Qualified Stock Option Agreement between the  Company and David P. Reiland.                                                                                                   |
| 10.14   | (29)       | 2004 Stock Incentive Plan of Magnetek, Inc.                                                                                                                                  |
| 10.15   | (30)       | Form of Non-Qualified Stock Option Agreement  Pursuant to 2004 Stock Incentive Plan.                                                                                         |
| 10.16   | (30)       | Form of Restricted Stock Award Agreement  Pursuant to 2004 Stock Incentive Plan.                                                                                             |
| 10.17   | (29)       | Second Amendment to the 1997 Non-Employee Director  Stock Option Plan of Magnetek, Inc.                                                                                      |
| 10.18   | (27)       | Executive Employment Agreement dated as of  May 9, 2005 between the Company and Thomas G. Boren.                                                                             |
| 10.19   | (16)       | Change of Control Agreement dated October 20,  1998 between Antonio Canova and the Company.                                                                                  |
| 10.20   | (16)       | Change of Control Agreement dated October 20,  1998 between Alexander Levran and the Company.                                                                                |
| 10.21   | (16)       | Change of Control Agreement dated October 20,  1998 between David P. Reiland and the Company.                                                                                |
| 10.22   | (17)       | Change of Control Agreement dated November 1,  2000 between Tina McKnight and the Company.                                                                                   |
| 10.23   | (23)       | Amended and Restated Change of Control Agreement  dated April 30, 2003 between Tina McKnight and the Company.                                                                |
| 10.24   | (19)       | Change of Control Agreement dated December 11,  2002, between Peter McCormick and the Company.                                                                               |
| 10.25   | (21)       | Change of Control Agreement dated July 29, 2003  between Marty Schwenner and the Company.                                                                                    |
| 10.26   | (31)       | Change of Control Agreement dated September 29,  2005 between Stephen Torres and the Company.                                                                                |
| 10.27   | (18)       | Tax Agreement dated as of February 12, 1986  between the Company and Farley Northwest Industries, Inc.                                                                  |
| 10.28   | (30)       | Credit Agreement dated as of September 30,  2005, among the Company, Magnetek ADS Power, Inc., Magnetek Mondel  Holding, Inc., and Wells Fargo Foothill, Inc. |

13

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| 10.29 | (30) | Credit Agreement dated as of September 30,  2005, among the Company, Magnetek ADS Power, Inc., Magnetek Mondel  Holding, Inc., MagneTek National Electric Coil, Inc., Magnetek  Alternative Energy, Inc., Mondel ULC, and Ableco Finance, LLC. |
|-------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.30 | (30) | Definitions to Credit Agreements referenced in  Exhibits 10.28 and 10.29 above.                                                                                                                                                                                         |
| 10.31 | (32) | First Amendment to Credit Agreement and Waiver dated  as of November 29, 2005, among the Company, certain subsidiaries of the  Company party thereto, the lenders party thereto and Wells Fargo  Foothill, Inc., as administrative agent.                     |
| 10.32 | (32) | Amendment No. 1 to Financing Agreement dated as  of November 29, 2005, among the Company, certain subsidiaries of the  Company party thereto, the lenders party thereto and Ableco Finance LLC, as  collateral agent and administrative agent.                |
| 10.33 | (33) | Second Amendment to Credit Agreement and Waiver  dated as of April 20, 2006, among the Company, certain subsidiaries of  the Company party thereto, the lenders party thereto and Wells Fargo  Foothill, Inc., as administrative agent.                       |
| 10.34 | (33) | Amendment No. 2 to Financing Agreement dated as  of April 24, 2006, among the Company, certain subsidiaries of the  Company party thereto, the lenders party thereto and Ableco Finance LLC, as  collateral agent and administrative agent.                   |
| 10.35 | (15) | Lease of Pomaz, Hungary facility.                                                                                                                                                                                                                                       |
| 10.36 | (20) | Lease of Menomonee Falls, Wisconsin facility dated  as of July 23, 1999.                                                                                                                                                                                           |
| 10.37 | (24) | Contract for Current Account Credit With Mortgage  Lien Pursuant to Article 38 and Subsequent Articles of Legislative  Decree No. 385/1993 (Republic of Italy).                                                                                               |
| 10.38 | (25) | Joinder Agreement dated as of April 23, 2004 by  and among the Company, SEI Private Trust Company and LaSalle Bank, N.A.                                                                                                                                           |
| 10.39 | **   | Agreement for the Sale of Magnetek, Inc. Power  Electronics Group dated as of September 28, 2006, by and between the Company  and Power-One, Inc.                                                                                                                       |
| 10.40 | **   | Forbearance Agreement dated as of September 22,  2006, among the Company, certain subsidiaries of the Company party thereto,  the lenders party thereto and Ableco Finance LLC, as collateral agent and  administrative agent.                                          |
| 10.41 | **   | Forbearance Agreement dated as of September 22,  2006, among the Company, certain subsidiaries of the Company party thereto,  the lenders party thereto and Wells Fargo Foothill, Inc. as administrative  agent.                                                        |
| 13.1  | **   | 2006 Annual Report.                                                                                                                                                                                                                                                     |
| 21.1  | **   | Subsidiaries of the Registrant as of July 2, 2006.                                                                                                                                                                                                                      |
| 23.1  | **   | Consent of Independent Registered Public Accounting  Firm.                                                                                                                                                                                                              |
| 31.1  | **   | Certification Pursuant to 15 U.S.C.  Section 7241.                                                                                                                                                                                                                 |
| 31.2  | **   | Certification Pursuant to 15 U.S.C.  Section 7241.                                                                                                                                                                                                                 |
| 32.1  | **   | Certifications Pursuant to 18 U.S.C.  Section 1350.                                                                                                                                                                                                                |

 

| **   | Filed with this Form 10-K.                                                                                                                                                      |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)  | Previously filed with  the Registration Statement on Form S-3 filed on August 1,  1991, Commission File No. 33-41854, and incorporated herein by  this reference.     |
| (2)  | Previously filed with  Form 8-K filed August 1, 2006 and incorporated herein by this  reference.                                                                           |
| (3)  | Previously filed with  Form 10-K for Fiscal Year ended June 30, 1991 and  incorporated herein by this reference.                                                           |
| (4)  | Previously filed with  Form 10-K for Fiscal Year ended June 30, 1996 and  incorporated herein by this reference.                                                           |
| (5)  | Previously filed with  Form 10-K for Fiscal Year ended June 30, 1992 and  incorporated herein by this reference.                                                           |
| (6)  | Previously filed with  Form 10-Q for quarter ended December 31, 1994 and  incorporated herein by this reference.                                                           |
| (7)  | Previously filed with  the Registration Statement on Form S-8 filed on February 10,  1998, Commission File No. 333-45935, and incorporated herein by  this reference. |
| (8)  | Previously filed with  Form 10-Q for quarter ended September 30, 2000 and  incorporated herein by this reference.                                                          |
| (9)  | Previously filed with  Form 10-Q/A for quarter ended September 30, 1999 and  incorporated herein by this reference.                                                        |
| (10) | Previously filed with  Form 8-K filed May 12, 2003 and incorporated herein by this  reference.                                                                             |
| (11) | Previously filed with  the Registration Statement on Form S-8 filed on February 10,  1998, Commission File No. 333-45939, and incorporated herein by  this reference. |

14

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| (16) | Previously filed with  Form 10-Q for quarter ended December 31, 1998 and  incorporated herein by this reference.                                                        |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (17) | Previously filed with  Form 10-Q for quarter ended December 31, 2000 and  incorporated herein by this reference.                                                        |
| (18) | Previously filed with  Amendment No. 1 to Registration Statement filed on February 14,  1986 and incorporated herein by this reference.                                 |
| (19) | Previously filed with  Form 10-Q for Quarter ended December 31, 2002, and  incorporated herein by this reference.                                                       |
| (20) | Previously filed with  Form 10-K for Fiscal Year ended June 27, 1999 and  incorporated herein by this reference.                                                        |
| (22) | Previously filed with  Form 10-Q for quarter ended March 31, 2002 and incorporated  herein by this reference.                                                           |
| (24) | Previously filed with  Registration Statement on Form S-3 filed on November 13,  2003, Commission File No. 333-110460, and incorporated herein by  this reference. |
| (25) | Previously filed with  Registration Statement on Form S-3 filed on May 21, 2004,  Commission File No. 333-115724, and incorporated herein by this  reference.      |
| (26) | Previously filed with  Form 8-K dated October 21, 2003 and incorporated herein by  this reference.                                                                      |
| (27) | Previously filed with  Form 8-K dated June 30, 2005.                                                                                                                    |
| (29) | Previously filed with  Form 10-Q for quarter ended December 31, 2004, and  incorporated herein by this reference.                                                       |
| (30) | Previously filed with  Form 10-Q for quarter ended October 2, 2005, and incorporated  herein by this reference.                                                         |
| (31) | Previously filed with  Form 10-K for Fiscal Year ended July 3, 2005 and incorporated  herein by this reference.                                                         |
| (32) | Previously filed with  Form 8-K filed December 6, 2005 and incorporated herein by  this reference..                                                                     |
| (33) | Previously filed with  Form 8-K filed April 26, 2006 and incorporated herein by this  reference.                                                                        |

 

**SCHEDULE II**

**MAGNETEK, INC.VALUATION AND QUALIFYING ACCOUNTSYears ended June 27, 2004,JULY 2, 2005 AND JULY 2, 2006**

**(amountsin thousands)**

| ** **                          | ** ** | ** ** | ** ** | **Balance at  Beginning of year** | ** ** | ** ** | ** ** | **Additions charged  to earnings** | ** ** | ** ** | ** ** | **Deductions from  Allowance** | ** ** | ** ** | ** ** | **Other(a)** | ** ** | ** ** | ** ** | **Balance at end of  year** | ** ** |
|-------------------------------------|------------|------------|------------|--------------------------------------------------|------------|------------|------------|----------------------------------------------|------------|------------|------------|-------------------------------------|------------|------------|------------|--------------|------------|------------|------------|--------------------------------------------|------------|
| *June 27,  2004*               |       |       |       |                                             |       |       |       |                                         |       |       |       |                                |       |       |       |         |       |       |       |                                       |       |   |   |   |   |   |   |   |   |   |   |
| Allowance for  doubtful receivables |       |       |       |                                             | $          | 709        |       |                                         |       |       |       | $                                   | -          |       |       |         |       |       | $          | (143                                       | )          |   |   |   |   | $ | (168 | ) |   |   |   |   | $ | 398 |   |   |
| *July 3,  2005*                |       |       |       |                                             |       |       |       |                                         |       |       |       |                                |       |       |       |         |       |       |       |                                       |       |   |   |   |   |   |   |   |   |   |   |
| Allowance for  doubtful receivables |       |       |       |                                             | $          | 398        |       |                                         |       |       |       | $                                   | 603        |       |       |         |       |       | $          | (255                                       | )          |   |   |   |   | $ | 1 |   |   |   |   |   | $ | 747 |   |   |
| *July 2,  2006*                |       |       |       |                                             |       |       |       |                                         |       |       |       |                                |       |       |       |         |       |       |       |                                       |       |   |   |   |   |   |   |   |   |   |   |
| Allowance for doubtful receivables  |       |       |       |                                             | $          | 747        |       |                                         |       |       |       | $                                   | 11         |       |       |         |       |       | $          | (192                                       | )          |   |   |   |   | $ | 2 |   |   |   |   |   | $ | 568 |   |   |

 

(a)    Represents primarily adecrease to pre-existing allowances for doubtful accounts for the year endedJune 27, 2004.

**SIGNATURES**

Pursuantto the requirements of Section 13 or 15(d) of the Securities ExchangeAct of 1934, the Registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized in the City of Chatsworth,State of California, on the 29th day of September, 2006.
|            | **MAGNETEK,  INC.** |
|------------|---------------------|
| ** ** | **(Registrant)**    |
| ** ** | ** **          |
|       |                | /s/ THOMAS G.  BOREN |   |
|       |                | Thomas G. Boren |   |
|       |                | *Chief  Executive Officer* |   |

 

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Pursuantto the requirements of the Securities Exchange Act of 1934, this report hasbeen signed below by the following persons on behalf of the Registrant and inthe capacities and on the dates indicated:
| ***Signature***                            | ***Title***                                                                          | ***Date***               |
|--------------------------------------------|--------------------------------------------------------------------------------------|--------------------------|
| /s/ ANDREW G. GALEF  Andrew G. Galef       | Chairman of the Board of Directors                                                   | September 29,  2006 |
| /s/ THOMAS G. BOREN  Thomas G. Boren       | Director and Chief  Executive Officer                                                | September 29,  2006 |
| /s/ DEWAIN K. CROSS  Dewain K. Cross       | Director                                                                             | September 29,  2006 |
| /s/ YON Y. JORDEN  Yon Y. Jorden           | Director                                                                             | September 29,  2006 |
| /s/ PAUL J. KOFMEHL  Paul J. Kofmehl       | Director                                                                             | September 29,  2006 |
| /s/ MITCHELL I. QUAIN  Mitchell I. Quain   | Director                                                                             | September 29,  2006 |
| /s/ ROBERT E. WYCOFF  Robert E. Wycoff     | Director                                                                             | September 29,  2006 |
| /s/ DAVID P. REILAND  David P. Reiland     | Executive Vice President  and Chief Financial Officer  (Principal Financial Officer) | September 29,  2006 |
| /s/ MARTY J. SCHWENNER  Marty J. Schwenner | Vice President and  Controller  (Principal Accounting Officer)                       | September 29,  2006 |

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**Chief ExecutiveOfficer and Chief Financial Officer Certifications**

**The certifications of Magnetek’sChief Executive Officer and Chief Financial Officer required under Section 302and 906 of the Sarbanes-Oxley Act of 2002 have been filed with the Securitiesand Exchange Commission as Exhibits 31.1, 31.2, and 32.1 to the Company’sAnnual Report on Form 10-K for the fiscal year ended July 2,2006.**

Additionally, in December 2005, Magnetek’s ChiefExecutive Officer filed with the New York Stock Exchange (“NYSE”) the annualcertification required to be furnished pursuant to Section 303A.12 of theNYSE Listed Company Manual. The certification confirmed that Magnetek’s ChiefExecutive Officer was not aware of any violation by Magnetek of the NYSE’scorporate governance listing standards.

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM**

The Board of Directors andStockholdersMagnetek, Inc.

We have audited the consolidated financial statementsof Magnetek, Inc. as of July 2, 2006 and July 3, 2005 and foreach of the three years in the period ended July 2, 2006, and have issuedour report thereon dated September 28, 2006 (included elsewhere in thisAnnual Report on Form 10-K). Our audits also included the financialstatement schedule listed in Item 15(a) of this Annual Report on Form 10-K.This schedule is the responsibility of the Company’s management. Ourresponsibility is to express an opinion based on our audits.

In ouropinion, the financial statement schedule referred to above, when considered inrelation to the basic financial statements taken as a whole, presents fairly inall material respects the information set forth therein.
|  | /s/ Ernst & Young LLP |
|--|--------------------------------|

 

WoodlandHills, California

September 28, 2006

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