UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________

FORM 10-Q
__________

                     (Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 2, 2004

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ______ to ______

1-6112
(Commission File Number)
__________


NORTEK, INC.
(Exact name of registrant as specified in its charter)
__________
 
 

 Delaware

 05-0314991

 (State or other jurisdiction of

  (I.R.S. Employer

 incorporation or organization)

 Identification No.)

 

 

 50 Kennedy Plaza, Providence, RI

 02903-2360

 (Address of principal executive offices)

  (Zip Code)

 

 

 (401) 751-1600

 (Registrant's telephone number, including area code)

 
__________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]

The number of shares of Capital Stock outstanding as of November 12, 2004 was 3,000.




PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NORTEK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Amounts in thousands)

   
October 2,
  
December 31,
   
2004
2003
  
     (Unaudited)  
Assets
          
Current Assets:
  
 
      
Cash and cash equivalents
  
$
70,687
  
$
194,120
  
Restricted cash and investments at cost, which
              
   approximates market
   
7,318
   
1,223
 
Accounts receivable, less allowances
              
   of $5,490 and $5,811
    
243,073
   
212,812
 
Inventories:
              
Raw materials
   
68,845
   
53,241
 
Work in process
   
26,692
   
18,809
 
Finished goods
   
115,748
   
84,710
 
     
211,285
   
156,760
 
Prepaid expenses
   
9,498
   
6,541
 
Other current assets
   
27,874
    
14,665
 
Prepaid income taxes
   
42,918
   
17,741
 
Assets of discontinued operations
   
---
   
502,811
 
Total current assets
   
612,653
    
1,106,673
 
               
Property and Equipment, at Cost:
              
Land
   
11,278
   
7,591
 
Buildings and improvements
   
71,625
   
67,296
 
Machinery and equipment
   
109,554
   
136,194
 
     
192,457
   
211,081
 
Less accumulated depreciation
   
2,496
   
17,579
 
Total property and equipment, net
   
189,961
   
193,502
 
               
Other Assets:
              
Goodwill
   
1,314,184
   
675,846
 
Intangible assets, less accumulated amortization
              
   of $1,404 and $9,122
   
91,268
   
94,645
 
Deferred debt expense
   
33,850
   
12,589
 
Deferred tax benefit
    
12,848
   
-
 
Other
   
7,845
   
16,725
 
     
1,459,995
   
799,805
 
Total Assets
  
$
2,262,609
  
$
2,099,980
  
               
Liabilities and Stockholders' Investment
    
 
 
      
               
Current Liabilities:
              
Notes payable and other short-term obligations
 
$
5,022
  
$
8,120
  
Current maturities of long-term debt
   
14,051
   
7,229
 
Accounts payable
   
150,201
   
111,041
 
Accrued expenses and taxes, net
   
172,137
   
149,297
 
Liabilities of discontinued operations
   
-
   
141,258
 
Total current liabilities
   
341,411
   
416,945
 
               
Other Liabilities:
              
Deferred income taxes
   
-
   
21,368
 
Other
   
161,716
   
136,833
 
     
161,716
   
158,201
 
               
Notes, Mortgage Notes and Obligations
              
Payable, Less Current Maturities 
    
1,348,223
   
1,324,626
 
               
Stockholders' Investment:
              
Common stock, $0.01 par value, authorized 3,000 shares;
              
   3,000 issued and outstanding at October 2, 2004
    
---
   
---
 
Series B Preference Stock, $1.00 par value; authorized
              
   19,000,000 shares; 8,130,442 shares issued and
             
   outstanding at December 31, 2003
    
---
   
8,130
 
Class A Common Stock, $1.00 par value; authorized 19,000,000
              
   shares; 397,380 shares issued and outstanding
              
   at December 31, 2003
    
---
   
397
 
Additional paid-in capital
   
407,679
   
172,244
 
Accumulated deficit
    
(400
)
  
---
 
Accumulated other comprehensive income
    
3,980
   
19,437
 
Total stockholders' investment
   
411,259
   
200,208
 
Total liabilities and Stockholders' Investment:
  
$
2,262,609
  
$
2,099,980
  
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



NORTEK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

   
For the Periods
  
   
Post-Acquisition
  
Post-Recapitalization
  
   
Aug. 28, 2004 -
  
July 4, 2004 -
  
July 6, 2003 -
  
   
Oct. 2, 2004
  
Aug. 27, 2004
  
Oct. 4, 2003
  
               
   
(Amounts in thousands)
  
   
(Unaudited)
  
               
Net Sales 
  
$
161,028
  
$
266,836
  
$
395,873
  
                     
Costs and Expenses:
                    
Cost of products sold
   
115,892
   
191,073
   
276,982
 
Selling, general and administrative expense
   
28,267
   
46,014
   
67,484
 
Amortization of intangible assets
   
1,404
   
2,020
   
1,975
 
Expenses and charges arising from the Acquisition
    
-
   
83,700
   
-
 
     
145,563
   
322,807
   
346,441
 
Operating earnings (loss)
    
15,465
   
(55,971
)
  
49,432
 
Interest expense
   
(16,197
)
  
(12,092
)
  
(12,601
)
Loss from debt retirement
    
-
   
(118,778
)
  
---
 
Investment income
   
32
   
241
   
269
 
Earnings (loss) from continuing operations
                    
before provision (benefit) for income taxes
   
(700
)
  
(186,600
)
  
37,100
 
Provision (benefit) for income taxes
   
(300
)
  
(55,200
)
  
16,300
 
Earnings (loss) from continuing operations 
    
(400
)
  
(131,400
)
  
20,800
 
Earnings from discontinued operations 
    
-
   
500
   
9,100
 
Net earnings (loss)
  
$
(400
)
$
(130,900
)
$
29,900
  
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



NORTEK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

   
For the Periods
  
   
Post-Acquisition
  
Post-Recapitalization
  
Pre-Recapitalization
  
   
Aug. 28, 2004 -
  
Jan. 1, 2004 -
  
Jan. 10, 2003 -
  
Jan. 1, 2003 -
  
   
Oct. 2, 2004
  
Aug. 27, 2004
  
Oct. 4, 2003
  
Jan. 9, 2003
  
   
(Amounts in thousands)
  
   
(Unaudited)
  
                   
Net Sales 
  
$
161,028
  
$
1,117,860
  
$
1,117,116
  
$
24,751
  
                           
Costs and Expenses:
                          
Cost of products sold