By Susan A. Baird
PBN Web Editor
PROVIDENCE – Home and commercial technology manufacturer Nortek Inc. today posted a first-quarter loss of $4.1 million, compared with a year-ago profit of $9.2 million, on net sales that fell 2.4 percent to $540 million as the housing slump continued.
Acquisitions contributed $11.2 million in net sales in the fiscal quarter ended March 29 but subtracted $1.2 million from operating earnings, which fell 47.9 percent to $23.4 million, the company said.
Meanwhile, NTK Holdings Inc. – the parent of Nortek Holdings Inc., which is the parent of Nortek Inc. – posted a net loss of $14.0 million compared with the 2007 first quarter’s net earnings of $1.2 million, as interest costs edged up 1.7 percent to $43.0 million.
(NTK’s balance sheet is similar to Nortek’s, except for certain senior debt and deferred compensation costs not shared by its subsidiaries.)
First-quarter results included $200,000 in one-time expenses related to a dispute with a supplier and a loss of $100,000 on foreign exchange. Results for the year-ago period included $3.7 million in one-time expenses: $600,000 from the closure of NuTone Inc.’s Cincinnati facility, $1.0 million in legal and other fees related to subsidiaries in Italy and Poland, a $1.8 million reserve for amounts due from HVAC customers and a foreign-exchange loss of $300,000.
“Nortek continues to manage its business well in this difficult housing market,” Chairman and CEO Richard L. Bready said in a statement this morning. “However, operating results were adversely impacted as the housing market continued to weaken.
“Additionally, operating earnings were also impacted in the first quarter of 2008 by higher commodity and transportation costs, which were only partially offset by continued strategic sourcing initiatives and improvements in manufacturing efficiency.”
The cost of products sold in the first quarter rose 1.8 percent compared with a year ago to $391.6 million, NTK said. Selling and administrative costs rose 1.2 percent to $118.5 million.
Going forward, Bready said, “we expect the existing home sales market and the continued instability in the troubled mortgage market will continue to have a negative impact on consumer spending on home remodeling and repair expenditures throughout 2008.”
NTK Holdings Inc., a Delaware corporation that has its headquarters in Providence, is the parent of Nortek Holdings Inc. and Nortek Inc., a maker of branded residential and commercial merchandise including HVAC, ventilation and home security products. Additional information can be found at www.nortek-inc.com.
