PROVIDENCE – On the eve of a key hearing in its bankruptcy case, Nortek Inc. said Thursday its losses narrowed in the third quarter despite lower sales.
Nortek, the maker of ventilation, security and other home products, posted a net loss of $12.4 million in the three months ended Oct. 3, compared with a year-earlier net loss of $644.7 million, which included a $600 million one-time charge. Revenue fell 23 percent to $451.8 million.
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The company, which filed for bankruptcy on Oct. 21, reported an operating profit of $27.7 million for the quarter. A U.S. Bankruptcy Court hearing on the company’s reorganization plan is scheduled for Friday, and Nortek said it expects to emerge from bankruptcy around Dec. 21.
“Nortek continues to manage its business effectively as the residential and commercial markets continue to struggle,” Richard L. Bready, the company’s chairman and CEO, said in a statement. Cost-cutting and other measures “have resulted in positive liquidity and improving margins,” he added.
For the first nine months of the year, the company posted an operating loss of $173.4 million, which included a one-time $250 million charge, as sales decreased 22 percent to $1.38 billion.
“Recovery of the housing market is uneven, but more positive than negative,” Bready said. “Additionally, the North American commercial construction market continues its downward trend.”
Nortek said it had about $181 million in cash and marketable securities on hand and had used $150 million of its revolving credit facility as of Oct. 3.
Nortek’s parent company, NTK Holdings Inc., has asked the court to approve an agreement backed by its creditors that would reduce the company’s debt load by about $1.3 billion, or 47 percent, through a debt-for-equity exchange.
NTK was bought in 2004 by Thomas H. Lee Partners, a private-equity firm in Boston, for about $1.75 billion. The company had been taken private a year earlier by Kelso & Co. and Nortek executives, including Bready.
The company, which had $2.3 billion in revenue last year, listed $1.65 billion in assets and $2.78 billion in liabilities in its bankruptcy filing.
Additional information is available at nortek-inc.com.
