Nortek Post Q2 Net Loss On Rising Sales

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Providence, R.I. - Nortek increased its net sales in the second quarter and first half but posted lower operating earnings in both periods and net losses for both periods.

The supplier of residential and commercial ventilation, HVAC and technology products is parent of multiple residential brands, including Niles Audio, Xantech, Elan, Omnimount, Panamax and SpeakerCraft.

Company-wide sales rose 11 percent in the second quarter to $564.9 million and by 12 percent in the first half to $1.05 billion, thanks to recent acquisitions. The quarter's sales were up entirely as a result of recent acquisitions, and all but $3.5 million of the $114 million first-half sales gain was due to acquisitions.

Operating earnings declined 23 percent to $20.8 million in the quarter and by 27.5 percent in the half to $22.7 million.

 The first-quarter net loss hit $31.9 million compared with a year-ago net profit of $300,000. The first-half net loss widened to $53 million from the year-ago $13.1 million.

In the company's tech segment, consisting mainly of residential products but including products for select commercial applications, dollar volume and operating earnings were up in the quarter and half.

 For the quarter, tech sales rose 56 percent to $180.6 million, and operating earnings rose 387 percent to $19 million. For the half, tech sales rose 61 percent to $337.9 million, and the segment posted operating earnings of $20.7 million compared to a year-ago operating loss of $3.5 million.

The results include recent acquisitions Ergotron and TV One Broadcast Sales. Ergotron, acquired last December, supplies mounting and mobility products for the health care, education and office markets. TV One, acquired in April, sells video processing gear for the professional A/V and broadcast markets.

In other announcements, the company said it will file with Nasdaq to go public and said it hired an executive recruiter to find a new CEO following the July 1 retirement of Richard Bready, the former chairman, president and CEO.

Meantime, interim CEO J. David Smith said Nortek "is well-positioned to take advantage of opportunities when the business climate improves."


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