Exhibit
99.1
NTK
HOLDINGS REPORTS
14%
INCREASE IN 2ND-QUARTER
REVENUES
PROVIDENCE,
RI, August 20, 2007—NTK Holdings, Inc. (“NTK
Holdings”), the parent company of Nortek Holdings,
Inc. (“Nortek Holdings”) and Nortek,
Inc. (“Nortek”), a leading diversified global
manufacturer of innovative, branded residential and commercial ventilation,
HVAC
and home technology convenience and security products, today announced
second-quarter financial results. NTK Holdings
reported sales of $644 million and operating earnings of $64.7 million for
the
quarter ended June 30, 2007.
Richard
L. Bready, Chairman and Chief Executive Officer said, “We are pleased with
NTK Holdings’ second-quarter performance considering the
difficult market environment.” Mr. Bready said that, “NTK
Holdings’ 14-percent growth in net sales
for the second quarter was powered by increased revenues in NTK
Holdings Home Technology Products and Air Conditioning and Heating
Products Segments. Sales to the built-in products wholesale channel
remain soft due to the weak housing market. We experienced increased
commodity costs during the quarter, which have been partially offset by
efficiency programs and price increases.” Mr. Bready added,
“NTK Holdings continued its strategy of increasing its brands
and product offerings by completing four acquisitions.”
Key
financial highlights from continuing operations for the second quarter of
2007
included:
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·
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Net
sales of $644 million, an increase of 14.2 percent compared to
the $564 million recorded in
2006.
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·
|
Operating
earnings of $64.7 million compared to $97.0 million in the second
quarter
of 2006. Operating earnings in the second quarter of 2006
included a $32.4-million gain resulting from the curtailment of
post-retirement medical benefits net of charges related to the
closure of
the Company’s NuTone Cincinnati, Ohio
facility.
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|
·
|
Depreciation
and amortization expense of $16.5 million compared to $16.1 million
in last year’s second quarter.
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|
·
|
Acquisitions
contributed approximately $35.2 million in net sales and $4.9 million
to operating earnings for the quarter ended June 30,
2007.
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As
of
June 30, 2007, NTK Holdings had approximately $75 million in
unrestricted cash, cash equivalents and marketable securities and had $84
million of borrowings outstanding under its revolving credit
facility.
Key
financial highlights from continuing operations for the first half of 2007
included:
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·
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Net
sales of $1,197 million, an increase of 9.0 percent compared to
the $1,098 million recorded in the first six months of
2006.
|
|
·
|
Operating
earnings of $109.5 million compared to $161.5 million in the first
half of
2006. Operating earnings for 2006 includes a $32.4-million gain
resulting from the curtailment of post-retirement medical benefits
net of
charges related to the closure of the Company’s NuTone Cincinnati, Ohio
facility.
|
|
·
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Depreciation
and amortization expense of $31.1 million compared to $28.3 million
in the first six months of 2006.
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·
|
Acquisitions
contributed approximately $88.9 million in net sales and $15.1
million to
operating earnings for the six months ended June 30,
2007.
|
On
April 10, 2007, NTK Holdings acquired the assets and certain
liabilities of c.p. Allstar Corporation (“Allstar”) located in Downingtown,
Pennsylvania. Allstar is a manufacturer and distributor of
residential gate operators, garage door openers, radio controls and accessory
products for the garage door and fence industry.
On
June
25, 2007, NTK Holdings acquired International Electronics, Inc.
(“IEI”) through a cash-tender offer. IEI is located in Canton,
Massachusetts and designs and sells security and access-control components
and
systems for use in residential and light commercial applications.
On
July
23, 2007, NTK Holdings acquired the assets and certain
liabilities of Aigis Mechtronics LLC (“Aigis”). Aigis is located in
Winston-Salem, North Carolina and manufactures and sells equipment, such
as
camera housings, into the closed-circuit television portion of the global
security market.
On
July
27, 2007, NTK Holdings acquired all of the ownership units of
HomeLogic LLC (“HomeLogic”). HomeLogic is located in Marblehead,
Massachusetts and designs and sells software and hardware that facilitates
the
control of third-party residential subsystems such as home theatre, whole-house
audio, climate control, lighting, security and irrigation.
NTK
Holdings*, the parent company of Nortek Holdings* and
Nortek*, is a leading diversified global
manufacturer of
innovative, branded residential and commercial ventilation, HVAC and home
technology convenience and security products. NTK
Holdings and Nortek offer a broad array of products
including: range hoods, bath fans, indoor air quality systems,
medicine cabinets and central vacuums, heating and air conditioning systems,
and
home technology offerings, including audio, video, access control, security
and
other products.
*As
used herein, the terms “NTK Holdings,” “Nortek Holdings” or “Nortek” refers to
NTK Holdings, Inc., together with its subsidiaries, unless the context indicates
otherwise. These terms are used for convenience only and are not intended
as a
precise description of any of the separate corporations, each of which manages
its own affairs.
This
press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are based
on
Nortek’s current plans and expectations and involve risks and uncertainties that
could cause actual future activities and results of operations to be materially
different from those set forth in the forward-looking statements. Important
factors impacting such forward-looking statements include the availability
and
cost of raw materials and purchased components, the level of construction
and
remodeling activity, changes in general economic conditions, the rate of
sales
growth and product liability claims. Nortek undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new information,
future events or otherwise. For further information, please refer to the
reports
and filings of NTK Holdings and Nortek with the Securities and Exchange
Commission.
#
#
#
NTK
HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS
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For
the second quarter ended
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For
the first six months ended
|
|
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|
June
30, 2007
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|
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July
1, 2006
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June
30, 2007
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|
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July
1, 2006
|
|
| |
|
(Dollar
amounts in millions)
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
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Net
Sales
|
|
$ |
644.3
|
|
|
$ |
563.8
|
|
|
$ |
1,196.8
|
|
|
$ |
1,098.3
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Costs
and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Cost of products sold
|
|
|
452.1
|
|
|
|
393.7
|
|
|
|
836.7
|
|
|
|
764.2
|
|
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Selling, general and administrative expense, net (see Note
B)
|
|
|
121.1
|
|
|
|
67.3
|
|
|
|
238.2
|
|
|
|
162.6
|
|
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Amortization of intangible assets
|
|
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6.4
|
|
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|
5.8
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|
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|
12.4
|
|
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|
10.0
|
|
| |
|
|
579.6
|
|
|
|
466.8
|
|
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|
1,087.3
|
|
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|
936.8
|
|
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Operating
earnings
|
|
|
64.7
|
|
|
|
97.0
|
|
|
|
109.5
|
|
|
|
161.5
|
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Interest
expense
|
|
|
(48.7 |
) |
|
|
(42.3 |
) |
|
|
(91.0 |
) |
|
|
(78.4 |
) |
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Investment
income
|
|
|
0.5
|
|
|
|
0.5
|
|
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|
0.9
|
|
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|
1.2
|
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Earnings
before provision for income taxes
|
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16.5
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|
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55.2
|
|
|
|
19.4
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|
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|
84.3
|
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Provision
for
income taxes
|
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9.2
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|
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21.3
|
|
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10.9
|
|
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|
32.6
|
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Net
earnings
|
|
$ |
7.3
|
|
|
$ |
33.9
|
|
|
$ |
8.5
|
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|
$ |
51.7
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The
accompanying notes are an integral part of this unaudited condensed consolidated
summary of operations.
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(A)
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The
unaudited condensed consolidated summary of operations includes the
accounts of NTK Holdings, Inc. and all of its wholly-owned subsidiaries
(individually and collectively, the “Company” or “NTK Holdings”), after
elimination of intercompany accounts and transactions, without audit
and,
in the opinion of management, reflects all adjustments of a normal
recurring nature necessary for a fair statement of the interim periods
presented. It is suggested that this unaudited condensed
consolidated summary of operations be read in conjunction with the
consolidated financial statements and the notes included in the Company's
latest quarterly report on Form 10-Q, its annual report on Form 10-K
and
its Current Reports on Form 8-K as filed with the Securities and
Exchange
Commission (“SEC”).
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(B)
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During
the second quarter ended June 30, 2007 and July 1, 2006, the Company’s
results of operations include the following (income) and expense
items
recorded in cost of products sold and selling, general and administrative
expense, net in the accompanying unaudited condensed consolidated
summary
of operations:
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| |
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For
the second quarter ended *
|
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June
30, 2007
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|
July
1, 2006
|
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(Amounts
in millions)
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| |
|
|
|
|
|
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Gain
from curtailment of post-retirement medical and life insurance
benefits
|
|
$ |
---
|
|
|
$ |
(35.9 |
) |
|
Charges
related to the closure of the Company’s NuTone, Inc. Cincinnati, OH
facility (1)
|
|
|
0.8
|
|
|
|
3.5
|
|
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Charges
related to the closure of the Company’s Mammoth, Inc. Chaska, MN
facility
|
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|
0.3
|
|
|
|
---
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Legal
and other professional fees and expenses incurred in connection with
matters related to certain subsidiaries based in Italy and
Poland
|
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0.3
|
|
|
|
---
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Reserve
for amounts due from a customer in the HTP segment
|
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|
0.5
|
|
|
|
---
|
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Product
safety upgrade reserves in the RVP and HTP segments (2)
|
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|
(0.2 |
) |
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4.0
|
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Gain
on settlement of litigation in the HVAC segment
|
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---
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(0.4 |
) |
|
Non-cash
foreign exchange loss (gain) related to intercompany debt not indefinitely
invested in the Company’s subsidiaries
|
|
|
0.3
|
|
|
|
(0.2 |
) |
| |
|
$ |
2.0
|
|
|
$ |
(29.0 |
) |
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*
|
Unless
otherwise indicated, all items noted in the table have been recorded
in
selling, general and administrative expense, net in the accompanying
unaudited condensed consolidated summary of
operations.
|
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(1)
|
For
the second quarter ended June 30, 2007, all charges related to the
closure
of NuTone were recorded in selling, general and administrative expense,
net. For the second quarter ended July 1, 2006, approximately
$1.4 million of the charges related to the closure of NuTone was
recorded
in cost of products sold and approximately $2.1 million was charged
to
selling, general and administrative expense,
net.
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(2)
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The
RVP and HTP segments recorded these product safety upgrade reserves
in
cost of products sold.
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During
the first six months ended June 30, 2007 and July 1, 2006, the Company’s results
of operations include the following (income) and expense items recorded in
cost
of products sold and selling, general and administrative expense, net in the
accompanying unaudited condensed consolidated summary of
operations:
| |
|
For
the first six months ended *
|
|
| |
|
June
30, 2007
|
|
|
July
1, 2006
|
|
| |
|
(Amounts
in millions)
|
|
| |
|
|
|
|
|
|
|
Gain
from curtailment of post-retirement medical and life insurance
benefits
|
|
$ |
---
|
|
|
$ |
(35.9 |
) |
|
Charges
related to the closure of the Company’s NuTone, Inc. Cincinnati, OH
facility (1)
|
|
|
1.4
|
|
|
|
3.5
|
|
|
Charges
related to the closure of the Company’s Mammoth, Inc. Chaska, MN
facility
|
|
|
0.3
|
|
|
|
---
|
|
|
Legal
and other professional fees and expenses incurred in connection with
matters related to certain subsidiaries based in Italy and
Poland
|
|
|
1.3
|
|
|
|
---
|
|
|
Product
safety upgrade reserves in the RVP and HTP segments (2)
|
|
|
(0.2 |
) |
|
|
5.5
|
|
|
Reserve
for amounts due from customers in the HTP and HVAC
segments
|
|
|
2.3
|
|
|
|
---
|
|
|
Gain
on settlement of litigation in the HVAC segment
|
|
|
---
|
|
|
|
(0.4 |
) |
|
Non-cash
foreign exchange loss (gain) related to intercompany debt not
indefinitely invested in the Company’s subsidiaries
|
|
|
0.1
|
|
|
|
(0.3 |
) |
| |
|
$ |
5.2
|
|
|
$ |
(27.6 |
) |
|
|
*
|
Unless
otherwise indicated, all items noted in the table have been recorded
in
selling, general and administrative expense, net in the accompanying
unaudited condensed consolidated summary of
operations.
|
|
(1)
|
For
the first six months ended June 30, 2007, all charges related to
the
closure of NuTone were recorded in selling, general and administrative
expense, net. For the first six months ended July 1, 2006,
approximately $1.4 million of the charges related to the closure
of NuTone
was recorded in cost of products sold and approximately $2.1 million
was
charged to selling, general and administrative expense,
net.
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|
