PROVIDENCE – Citing continued weakness in the residential- and commercial-building sectors of the economy, Nortek Inc. reported a first-quarter net loss of $21.1 million, compared with a loss of $13.4 million a year earlier, despite a 13.4 percent increase in revenue to $488.6 million. On a per diluted share basis, the quarterly loss amounted to $1.40 per share.
“Challenging market conditions and rising commodity prices … put pressure on both net sales and operating earnings during our historically weakest quarter,” said Richard L. Bready, company chairman and CEO, in a statement.
According to the company, the first three months of 2011 saw U.S. housing starts decline 10 percent compared with the 2010 first quarter, while new home sales dropped 18 percent. In addition, existing home sales fell 2 percent as the residential improvement market declined nearly 10 percent. The company also noted that the non-residential construction market saw a 12.5 percent decline on the quarter.
The company reported that about $51.1 million of its sales volume came from business acquired in 2010.
Subsequent to the closing of its books for the first quarter, Nortek took two actions that it said would help it in the long term. In an April 26 private placement, the company issued $500 million in 8.5 percent senior notes, due 2021, while entering into a new six-year $350 million senior secured term loan. Proceeds from the two deals were used to refinance the company’s $753 million in 11 percent senior secured notes due 2013.
Bready said that the deals would free up $22 million annually from interest payment savings.
The company also reported that it acquired TV One Broadcast Sales Corp. on April 28 for $26.1 million. TV One sells products for the audio/visual and broadcast markets, and will fit in the company’s Technology Products division.
richard l. bready,
continuing weakness in residential and commercial building markets,
new term loan,