NORTEK ANNOUNCES RECORD SALES

PROVIDENCE, RI, February 17,1999—Nortek, Inc.(NYSE:NTK) a leading manufacturer and distributor of high-quality building products, today announced strong growth and earnings for the fourth quarter and full year ended December 31, 1998. Growth was achieved in all of the Company’s core businesses and was strengthened by three recent acquisitions: Ply Gem Industries, Inc., (August 1997), NuTone Inc., (July 1998), and Napco, Inc. (October 1998). Financial highlights included:

• Net sales for the year of $1.7 billion, a 53-percent increase, from $1.1 billion for 1997.
• EBITDA from continuing operations of $175.2 million, a 60-percent jump, from $109.7 million for the prior year.
• Net earnings of $35.0 million, an increase of 65 percent, from last year’s $21.2 million.
• Diluted earnings per share rose 47 percent to $3.15, from $2.15 reported for 1997, on an average 1,258,000 more shares outstanding. Diluted EPS for 1998 and 1997 are after amortization of acquired goodwill and other intangibles of $1.22 per share and $.58 per share, respectively.

Richard L. Bready, Chairman and Chief Executive Officer, said, “As 1998 unfolded, we made tremendous progress in combining newly acquired businesses into our existing operations.This successful integration is helping accelerate our growth, and we now hold leadership positions in many of our major product lines.  From a financial perspective, the Company continues to control costs and improve operating margins; 7.7 percent in 1998 from 7.3 percent in 1997, and 8.2 percent in the fourth quarter compared to 6.6 percent for the comparable period a year earlier. I’m particularly happy to note that we increased margins, earnings and EBITDA at a faster rate than the increase in net sales.  All this was accomplished while integrating three large acquisitions, selling eight businesses and completing debt and equity offerings. 

“Going forward, we remain in a favorable economic climate.  Low inflation, high employment, low interest rates, strong liquidity and strong consumer confidence are shaping the fulfillment of the American dream of home ownership and extensive home remodeling and expansion.  We are committed to growing our high-quality building products to help the realization of that dream.  As we continue to assimilate our strategic acquisitions and grow our existing businesses, we fully expect to build shareholder value in Nortek,” added Bready. 

Strong Finacial Performance

Operating earnings for 1998 increased 60 percent to $133.1 million, from $83.0 million in 1997.  Net interest expense for 1998 increased $35.5 million, to $75.8 million.  The increase results principally from the sale of $210.0 million of 8 7/8-percent Senior Notes in July, 1998 and from debt issued during 1997, and debt assumed as part of the Ply Gem acquisition, being outstanding for the full year in 1998.  For the fourth quarter, Nortek reported net sales of $438.0 million, an increase of 5.4 percent from $415.7 million a year earlier.

Operating earnings for the quarter were $36.0 million, up 31 percent over last year’s $27.4 million.  EBITDA from continuing operations for the quarter rose 29 percent to $47.0 million, from $36.6 million in 1997.  Net earnings for the 1998 fourth quarter were $11.4 million, more than three-and-one-half times the $3.1 million reported a year earlier.  Fourth quarter 1998 diluted earnings per share of $.96 were three times the $.32 reported for the fourth quarter of 1997, on an average 2,090,000 additional shares outstanding. 

During the quarter, Nortek completed the sale of three businesses: Allied Plywood Corporation, M&S Systems LP, and Moore-O-Matic, Inc.  For all of 1998, Nortek sold eight businesses and realized gross cash proceeds in excess of $112.0 million, of which $28.0 million was used to reduce bank debt. 

Nortek is a leading international manufacturer and distributor of high-quality, competitively priced building, remodeling and indoor environmental control products for the residential and commercial markets.  The Company offers a broad array of products for improving the environments where people live and work.  Its products include range hoods and other spot ventilation products, heating and air conditioning systems, wood and vinyl windows and doors, vinyl siding products, indoor air quality systems, and specialty electronic products.

This release contains forward-looking statements relating to future financial results. Actual financial performance may differ as a result of factors over which the Company has no control. Additional information which could affect the company's financial results is included in the Company's Securities and Exchange Commission filings, copies of which are available at no charge.

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