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Exhibit
99.1
NORTEK
REPORTS
INCREASE
IN 3rd-QUARTER
REVENUES
PROVIDENCE,
RI, November 12, 2007—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 third-quarter financial
results. Nortek reported sales of $602 million and
operating earnings of $37.6 million for the quarter ended September 29,
2007.
NTK
Holdings, the parent company of Nortek Holdings, Inc.
and Nortek, Inc. (“NTK Holdings”) announced it
intends to withdraw its registration statement
on Form S-1 for an initial public offering of its
stock. NTK Holdings has decided to withdraw the
registration statement due to the unsettled market conditions.
Richard
L. Bready, Chairman and Chief Executive Officer said, “The difficult market
environment and continued margin pressure from increased material costs impacted
our third-quarter performance.” Mr. Bready said that,
“Nortek’s 4-percent growth
in net sales for the third quarter was mainly due to increased revenues in
Nortek’s commercial HVAC business and its Home Technology
Products Segment. Sales to the built-in products wholesale channel
and residential HVAC remain soft due to the weak housing market. We
experienced increased commodity costs during the quarter, which have been
only
partially offset by efficiency programs and price increases.” Mr.
Bready added, “Nortek continued its strategy of increasing its
brands and product offerings by completing five acquisitions.”
Key
financial highlights from continuing operations for the third quarter of
2007
included:
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Net
sales of $602 million, an increase of 4.0 percent compared to
the $579 million recorded in
2006.
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·
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Operating
earnings of $37.6 million compared to $67.7 million in the third
quarter
of 2006.
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·
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Depreciation
and amortization expense of $15.8 million compared
to $15.9 million in last year’s third
quarter.
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·
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Acquisitions
contributed approximately $30.9 million in net sales
and $2.2 million to operating
earnings for the quarter ended September 29,
2007.
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As
of
September 29, 2007, Nortek had approximately $67 million in
unrestricted cash, cash equivalents and marketable securities and had $89
million of borrowings outstanding under its revolving credit
facility.
Key
financial highlights from continuing operations for the first nine months
of
2007 included:
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·
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Net
sales of $1,799 million, an increase of 7.3 percent compared to
the $1,677 million recorded in the first nine
months of 2006.
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·
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Operating
earnings of $147.2 million compared to $229.4 million in the first
nine
months of 2006. Operating earnings for 2006 includes a
$31.8-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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·
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Depreciation
and amortization expense of $46.9 million compared
to $44.2 million in the first nine months of
2006.
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·
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Acquisitions
contributed approximately $119.8 million in net sales
and $17.3 million to operating earnings for the nine
months ended September 29,
2007.
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Mr.
Bready added, “We expect the difficult market conditions in terms of residential
new construction and residential air conditioning to continue in
2008. Additionally, declines in existing home sales will likely have
a negative impact on industry remodeling spending in the fourth quarter and
the
first half of next year. To mitigate these trends for both the near
and long-term, Nortek has put in place several new strategic
cost-reduction initiatives and will continue to invest for growth and market
position in new products and technologies.”
Nortek’s
strategic growth program in the third quarter:
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·
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On
July 23, 2007, Nortek 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.
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·
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On
July 27, 2007, Nortek 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.
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·
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On
August 1, 2007, Nortek acquired certain assets of Solar
of Michigan, Inc. (“Triangle”). Triangle is located in
Coopersville, Michigan and manufactures, markets and distributes
bath
cabinets and related products.
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·
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On
September 18, 2007, Nortek acquired the stock of Stilpol
SP. Zo.O. (“Stilpol”) located in Zabrze, Poland and substantially all of
the assets of Metaltecnica S.r.l. (“MT”) located in Fabriano,
Italy. Stilpol and MT are suppliers of various fabricated metal
components and sub-assemblies to Nortek range hood
subsidiaries located in Italy and
Poland.
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Nortek*
(a wholly owned subsidiary of Nortek Holdings, Inc., which is a
wholly owned subsidiary of NTK Holdings, Inc.) is a leading
diversified global manufacturer of innovative, branded residential and
commercial ventilation, HVAC and home technology convenience and security
products. Nortek offers 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 term “Nortek” refers to Nortek, Inc., together with its
subsidiaries, unless the context indicates otherwise. This term is used for
convenience only and is 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 Nortek with the Securities and Exchange
Commission.
#
#
#
NORTEK,
INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS
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For
the third quarter ended
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For
the first nine months ended
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Sept.
29, 2007
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Sept.
30, 2006
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Sept.
29, 2007
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Sept.
30, 2006
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(Dollar
amounts in millions)
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Net
Sales
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$ |
602.2
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$ |
579.0
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$ |
1,799.0
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$ |
1,677.3
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Costs
and Expenses:
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Cost of products sold (see Note B)
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433.0
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404.2
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1,269.7
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1,168.4
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Selling, general and administrative expense, net (see Note
B)
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125.1
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100.9
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363.2
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263.3
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Amortization of intangible assets
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6.5
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6.2
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18.9
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16.2
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564.6
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511.3
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1,651.8
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1,447.9
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Operating
earnings
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37.6
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67.7
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147.2
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229.4
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Interest
expense
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(31.3 |
) |
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(29.9 |
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(91.3 |
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(85.9 |
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Investment
income
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0.6
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0.4
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1.5
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1.6
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Earnings
before provision for income taxes
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6.9
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38.2
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57.4
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145.1
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Provision
for
income taxes
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5.5
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15.1
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28.1
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55.7
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Net
earnings
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$ |
1.4
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$ |
23.1
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$ |
29.3
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$ |
89.4
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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 Nortek, Inc. and all of its wholly-owned subsidiaries
(individually and collectively, the “Company” or “Nortek”), 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 third quarter ended September 29, 2007 and September 30, 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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For
the third quarter ended *
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Sept.
29, 2007
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Sept.
30, 2006
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(Amounts
in millions)
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Charges
related to the closure of the Company’s NuTone, Inc. Cincinnati, OH
facility (1)
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$ |
0.4
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$ |
0.3
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Charges
related to the closure of the Company’s Mammoth, Inc. Chaska, MN
facility
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2.3
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---
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Charges
related to the closure of the Company’s Jensen, Inc. Vernon, CA
facility
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0.2
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---
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| Legal
and
other professional fees and expenses incurred in connection with matters
related to certain subsidiaries |
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based in Italy and Poland
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0.9
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---
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| Increase
in
product liability expense for the third quarter of 2007 as compared
to the
same period of 2006 |
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in the RVP segment (2)
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5.5
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---
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Product
safety upgrade reserves in the RVP and HTP segments (3)
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0.8
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---
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Loss
on settlement of litigation in the RVP segment
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1.9
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---
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Gain
on settlement of litigation in the HVAC segment
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---
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(1.2 |
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| Foreign
exchange losses (gains) related to transactions, including intercompany
debt not indefinitely invested |
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in the Company’s subsidiaries
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1.4
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(0.1 |
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$ |
13.4
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$ |
(1.0 |
) |
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*
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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)
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For
the third quarter ended September 29, 2007, all charges related to
the
closure of NuTone were recorded in selling, general and administrative
expense, net. For the third quarter ended September 30, 2006,
all charges related to the closure of NuTone were recorded in cost
of
products sold.
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(2)
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The
RVP segment recorded the increase in product liability expense in
cost of
products sold.
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(3)
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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 nine months ended September 29, 2007 and September 30, 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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For
the first nine months ended *
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Sept.
29, 2007
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Sept.
30, 2006
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(Amounts
in millions)
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Gain
from curtailment of post-retirement medical and life insurance
benefits
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$ |
---
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$ |
(35.9 |
) |
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Charges
related to the closure of the Company’s NuTone, Inc. Cincinnati, OH
facility (1)
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1.8
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4.1
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Charges
related to the closure of the Company’s Mammoth, Inc. Chaska, MN
facility
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2.6
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---
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Charges
related to the closure of the Company’s Jensen, Inc. Vernon, CA
facility
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0.2
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---
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| Legal
and
other professional fees and expenses incurred in connection with matters
related to certain subsidiaries |
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based in Italy and Poland
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2.2
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