Nortek narrows net loss to $1.2M in 1Q

NORTEK INC’s net loss narrowed to $1.2 million for the three months ended March 31.
Posted 5/11/12

PROVIDENCE – Nortek Inc.’s net loss narrowed to $1.2 million, or 8 cents per share, for the three months ended March 31 compared to a loss of $21.1 million, or $1.40 per share, during the same period 2011, the company announced late Thursday.

The residential and commercial ventilation maker saw a 7 percent increase in sales from $488.6 million during the first quarter of 2011 to $522.8 million in the 2012 first quarter.

According to the company’s release, acquisitions contributed $4.7 million to net sales for the quarter.

Gross margin increased to 27.9 percent during the period, a rise of 1.9 percentage points compared with a year earlier.

Year-over-year, operating earnings increased to $24.9 million from $1.9 million during the first three months of 2011.

“Nortek delivered improved results on both the top and bottom lines in the first quarter of 2012, driven primarily by growth in our commercial HVAC segment,” said Nortek President and CEO Michael J. Clarke. “At the same time, we continued to strengthen our operations, improve our cash conversion cycle and reduce our debt, while making progress in strategically positioning Nortek for profitable long-term growth.”

Selling, general and administrative expense decreased by $3.1 million to $110.1 million during the three months ended March 31. As a percentage of net sales, SGA expense decreased to 21 percent from 23.2 percent during the 2011 first quarter.

Depreciation and amortization expense for the first quarter of 2012 was $20.3 million, compared with $29.5 million during the first quarter 2011.

“Looking ahead to the balance of 2012, we expect activity in the residential and nonresidential construction markets to be up slightly from the levels experienced in 2011,” said Clarke.

“Although the headwinds that have affected our markets for the past few years seem to be easing, the environment remains far from robust,” said Clark. “Nonetheless, we believe [thanks to] the improved performance of our business positions, [we expect] Nortek not only to continue succeeding in the current demand environment, but also to deliver accelerated growth in sales and margins when construction, repair and remodeling activity finally rebounds on a sustainable basis.”

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