Nortek reports net loss in ’14, but sales increase nearly 9%

NORTEK PRESIDENT AND CEO MICHAEL J. Clarke said 2014 ended with a solid fourth quarter, driven by top-line growth in security and control solutions and RCH segments. / COURTESY PR NEWSWIRE
NORTEK PRESIDENT AND CEO MICHAEL J. Clarke said 2014 ended with a solid fourth quarter, driven by top-line growth in security and control solutions and RCH segments. / COURTESY PR NEWSWIRE

PROVIDENCE – Nortek Inc. reported a net loss of $45.6 million, or $2.92 per diluted share, in 2014, which is nearly 45 percent greater than the loss reported the year before, according to an earnings statement released this week.
Despite the loss, the company reported net sales of $2.5 billion, an 8.6 percent increase over last year’s figures.
In the fourth quarter that ended Dec. 31, the company showed a 16 percent year-over-year increase in sales to $636.8 million. Net income totaled $4.6 million, or 29 cents per diluted share, compared with a loss of $8.9 million, or 58 cents a share, during the prior-year period.
Last year, the company took an $80 million impairment charge (pretax) compared with a $4 million charge in 2013. Excluding the impairment charges, operating earnings in 2014 were $123.3 million compared with $92.2 million in 2013, a 34 percent increase that was driven by acquisitions and operational improvements.

President and CEO Michael J. Clarke said Nortek closed 2014 with a solid fourth quarter “driven by strong top-line growth in our security and control solutions (SCS) and RCH segments.” The latter segment manufactures and sells split-system and packaged air conditioners.
He said security and control solutions sales increased 20.3 percent to $85.5 million in the fourth quarter as a result of increased demand. Sales in RCH rose 18.6 percent to $95.1 million driven by customer demand, and acquisitions contributed to an additional $59.2 million in sales.
Clarke added that net sales in the ergonomic and productivity solutions business rose 5 percent due to strong demand for sit-to-stand workplace solutions and device management carts.
“Based on our current outlook, we expect 2015 to be a year of overall top-line growth for Nortek, driven by expansion in the residential and nonresidential construction markets, as well as continued strong demand in markets served by our SCS and ERG segments,” Clarke said.
“In addition, we expect operating performance in our AVC [audio, video and control solutions] businesses to continue to stabilize in 2015. We also expect to realize synergies in 2015 from our April 2014 acquisition of Reznor and our January 2015 acquisition of Anthro Corp. At the same time, we will continue to execute on our top-line growth strategies and review our global operations as we work to maximize long-term value for our shareholders,” Clarke added.
The company acquired Reznor for $260 million. Anthro, based in Oregon, produces charging carts and mobile work stations; it was acquired for approximately $50 million.

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