PROVIDENCE – Home and commercial technology manufacturer Nortek Inc. posted a second-quarter profit of $3.7 million, an 80.2 percent decline from the year-ago $18.7 million, on net sales that grew 0.43 percent to $647.1 million in “continuingly difficult markets.”
Meanwhile, NTK Holdings Inc. – the parent of Nortek Holdings Inc., which is the parent of Nortek Inc. – posted a net loss of $43.5 million, compared with its 2007 second-quarter profit of $7.3 million. Interest costs shrank 6.7 percent to $47.4 million, but the company’s provision against income taxes nearly quadrupled to $33.3 million from the year-ago $7.3 million.
(NTK’s balance sheet is similar to Nortek’s, except for certain senior debt and deferred compensation costs not shared by its subsidiaries.)
“We are pleased with Nortek second-quarter performance, as business conditions remained difficult in the company’s core markets,” Richard L. Bready, the company’s chairman and CEO, said in an after-market statement.
“Nortek continues to focus on cost-reduction initiatives, manufacturing efficiency improvements and strategic sourcing initiatives,” he said. Those efforts, “together with some price increases, have partially offset cost increases from commodities – particularly steel and copper – and transportation costs.”
Results for the quarter ended June 28 included a $9.9 million one-time expense related to the refinancing of all outstanding senior secured debt, to reduce the company’s interest expenses. (READ MORE) They also included a $4.5 million set-aside against a possible settlement of a dispute with a former supplier; and $1.6 million in expenses related to the closure of certain facilities by Nortek’s residential ventilation products (RVP) division and the startup of a range-hood facility in Mexico. Those expenses were partly offset by a one-time gain of $2.5 million from the sale of a manufacturing facility in the RVP division and a foreign-exchange gain of $1.5 million, compared with the year-ago foreign-exchange loss of $1.7 million.
“The mortgage crisis has driven housing starts down to a level of less than 1 million starts,” Bready noted. “This action has been amplified by high oil and gas prices and consumer confidence is at unprecedented lows.
“While we expect the difficult housing market will continue throughout 2008, Nortek plans to maintain its leadership position in these difficult markets while remaining poised for … improving home improvement and residential building markets.”
Last month, Nortek Inc. named Eric Roberts to serve as president of its CES Group Inc., which includes the company’s commercial HVAC businesses. (READ MORE Roberts – who took office July 21, replacing retired CES president David Huntley – was previously the chief operating officer of heating, ventilation and air conditioning (HVAC) giant McQuay Americas.
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NTK Holdings Inc., a Delaware corporation that has its headquarters in Providence, is the parent of Nortek Holdings Inc. and Nortek Inc. NTK is a maker of branded residential and commercial merchandise including heating, ventilation and air conditioning (HVAC), home security and home technology products. Additional information can be found at www.nortek-inc.com.
