Nortek Reports Record Sales, 1st-Quarter EPS UP 21 % PROVIDENCE, RI, May 4, 2000--Nortek, Inc. (NYSE:NTK), experiencing sales growth in all of the Company's operating groups, today announced record first-quarter 2000 net sales of $492 million, a 21-percent increase over the $407 million reported for the first quarter of 1999. The first quarter of 2000 includes $57.5 million of sales from acquisitions not included in the comparable 1999 period. Other financial highlights of the quarter included: Diluted earnings per share of $.35, an increase of 21 percent over the first quarter of 1999. Operating earnings of $30 million, an 8-percent increase from last year's $28 million. EBITDA from operations of $45 million, a 12-percent increase from $41 million for the prior year. Net earnings of $4 million, an increase of 14 percent from last year's $3.5 million. Diluted earnings per share for the first quarter of 2000 and the first quarter of 1999 are after amortization of goodwill and other intangible assets of $.44 per share and $.37 per share, respectively. Mr. Richard L. Bready, Chairman and Chief Executive Officer, said, "We are very pleased with our first-quarter performance which exceeded our estimates and represents the highest net sales for any first quarter in Nortek's history. Strong and continuing synergies from the Broan-NuTone combination continued to contribute earnings increases in the Residential Building Products Group, which was also favorably impacted by increasing earnings from our growing presence in the home entertainment and wireless security areas of the market. The Air Conditioning and Heating Products Group sales increased 10 percent despite a decline in the manufactured housing portion of our business, in line with the industry, which was offset by our continued growth in the site-built arena. Earnings for this Group increased in line with the overall increase in sales. The Windows, Doors and Siding Group's normal seasonal weakness was exacerbated by the inclusion this year of window operations not owned during the first quarter of 1999, and higher selling and raw material costs, not yet offset by increased selling prices." Operating results, due to the seasonal nature of Nortek's growing Windows, Doors and Siding Group, with its heavy concentration in the upper mid-west and northeast regions of the country, are normally lower in the first quarter of each year than the results expected in other quarters. 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. *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 the Company?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, product liability claims and other risks detailed in the Company?s reports filed with the Securities and Exchange Commission. NORTEK, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS (In thousands except per share amounts) For the Three Months Ended April 1, 2000 April 3, 1999 (Unaudited) Net sales............................................... $491,507 $406,700 Cost of products sold.................................. 358,218 296,916 Selling, general and administrative expenses............. 97,737 77,383 Amortization of goodwill and intangible assets.........       5,752       4,784   461,707   379,083 Operating earnings............................................. 29,800 27,617 Interest expense...................................................... (24,310) (23,966) Investment income.......................................................       1,910      2,849 Earnings before provision for income taxes................. 7,400 6,500 Provision for income taxes.........................................       3,400      3,000 Net earnings................................................................. $    4,000 $   3,500 Net earnings per share of common stock:   Basic........................................................................... $        .35 $        .30   Diluted........................................................................ $        .35 $        .29 Weighted average number of shares:   Basic.......................................................................    11,484     11,747   Diluted........................................................................    11,549     11,925 EBITDA from operations.............................................. $ 45,355 $ 40,658 Capital expenditures.................................................... $   7,667 $ 11,772 The accompanying notes are an integral part of this unaudited condensed consolidated summary of operations.   NORTEK, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS   A. The unaudited condensed consolidated summary of operations for Nortek, Inc. and its subsidiaries ("the Company"), in the opinion of management, reflects all adjustments necessary for a fair statement of the periods presented. It is suggested that this unaudited condensed consolidated summary of operations be read in conjunction with the financial statements and the notes included in the Company's latest Annual Report on Form 10-K, and its latest Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission.   B. EBITDA from operations is operating earnings plus depreciation and amortization expense (other than amortization of deferred debt expense and debt discount).    C.  Net sales for the Company's principal segments for the three months ended April 1, 2000 and April 3, 1999 were as follows:   Three Months Ended April 1, 2000 April 3, 1999 Unaudited (In millions) Residential Building Products $172.0 $154.3 Air Conditioning and Heating Products 127.6 116.4 Windows, Doors and Siding Products 172.5 117.4 Other     19.4     18.6           Total $491.5 $406.7   In the first quarter of 2000, acquisitions contributed approximately $57.5 million to the increase in net sales, of which approximately $9.3 million was in the Residential Building Products Segment, $4.0 million was in the Air Conditioning and Heating Products Segment and $44.2 million was in the Windows, Doors and Siding Products Segment. Operating earnings and depreciation and amortization expense for the Company’s principal segments for the three months ended April 1, 2000 and April 3, 1999 were as follows:   Three Months Ended April 1,2000 April. 3,1999 Unaudited (In millions) Operating Earnings: Residential Building Products $25.1 $19.1 Air Conditioning and Heating Products 12.7 11.7 Windows, Doors and Siding Products (4.6) (.2) Other, Net   (3.4)    (3.0) Consolidated Operating Earnings 29.8 27.6 Unallocated      Interest Expens (24.3) (23.9)      Investment Income     1.9      2.8 Earnings before Provision for    Income Taxes $  7.4 $   6.5 Depreciation and Amortization Expense: Residential Building Products $  5.6 $  5.0 Air Conditioning and Heating Products 3.0 2.6 Windows, Doors and Siding Products 6.6 4.9 Other       .4       .5 Consolidated Depreciation and Amortization    Expense $15.6 $13.0 Subsequent to the NuTone acquisition on July 31, 1998, the company has realized and expects to realize additional cost reductions (“NuTone Cost Reductions”) as a result of integrating NuTone into the Company’s operations.  The Company’s operating earnings for the three months ended April 1, 2000, include approximately $3.3 million of net cost savings related to NuTone Cost Reductions which are net of approximately $.7 million of related costs and expenses.  For the full year 1999, the Company’s operating earnings include approximately $14.0 million of net cost savings related to NuTone Cost Reductions which are net of approximately $3.4 million of related costs and expenses.  The Company expects to realize future incremental net NuTone Cost Reductions in excess of 1999 levels of approximately $6.0 million to $9.0 million annually.  Future NuTone Cost Reductions are estimates and actual savings achieved could differ materially. D.     The following is a summary of selected balance sheet amounts and ratios at April 1, 2000 and December 31, 1999: Balance at Unaudited (000's omitted) April 1, 2000 December 31, 1999 Unrestricted cash, equivalents and    marketable securities $      70,843 $    115,11 Short-term borrowings and current    maturities of indebtedness 14,730 14,040 Long-term indebtedness 1,022,138 1,023,616 Stockholders Investment 261,629 259,817 Debt to equity ratio 4 .0:1 4 .0:1 [ Back to News ]   [ Back To News Archive ]