Los Angeles-based Magnetek Inc. announced Tuesday that Frank Perna Jr. has resigned as president and chief executive of the troubled maker of electrical equipment. Chairman Andrew G. Galef will act as chief executive until a replacement is found.
Perna joined Magnetek, which was formed in 1984, as president and member of the board in June, 1985. He became chief executive in July, 1990. Sales rose from $195 million to $1.5 billion in the fiscal year ended June 30, 1993. Magnetek now has 60 manufacturing and service centers worldwide, with 18,000 employees.
Perna led the company to inclusion as one of the Fortune 500 companies in less than three years, the most rapid growth ever recorded in the index.
Much of the growth is attributable to commercial and industrial demand for the company’s energy-efficient ballasts for fluorescent lighting. To avoid having to build more power plants, utilities have recently offered rebates to companies that switch to high-efficiency lighting systems.
But Magnetek overestimated the demand, according to analysts and investors, and distributors ordered far more ballasts than were needed. Demand for new units has been stalled while the distributors reduce their excess inventory. Fourth-quarter earnings dropped 67% from fiscal 1992.
“The opportunity in this market is immense,” Perna said Tuesday, “but this market has never gone through such turbulence with regard to supply and demand.”
Perna said he has no definite plans, but had been considering such a move for some time. “My primary plans right now are to have some fun,” he said.
Carlene Murphy, co-manager of the Strong Common Stock Fund and Strong Opportunity Fund in Milwaukee, which sold their Magnetek holdings earlier this year, said: “Frank Perna is a very good operating manager. He might have been a little bit optimistic about the prospects for some of the businesses.”
Meanwhile, Jennifer Pokrzywinsky, an analyst at Morgan Stanley in New York, upgraded her recommendation Tuesday to “buy.”
Magnetek stock closed Tuesday at $13.375 a share on the New York Stock Exchange, up 25 cents for the day. The stock recently plunged to $12.50 a share from a high of $25.50 early in the year.