Providence, R.I. — Nortek posted a wider net loss in its fiscal fourth quarter following two consecutive quarters of net profits, but the company nonetheless posted a full-year 2012 net profit following a 2011 net loss.
For the quarter, net sales fell 5.6 percent year over year to $505.4 million but grew for the year by 2.8 percent to $2.2 billion. Nortek is the parent of multiple residential and commercial system brands,
The fourth-quarter net loss grew to $12.5 million from a year-ago net loss of $800,000, but for the full year, the company posted $9.5 million in net profits compared with a 2011 net loss of $55.9 million. The fourth-quarter net loss included $9.3 million in pretax expenses related to “restructurings and operational improvement initiatives” as well as a $6.4 million pretax net loss from debt retirement.
Fourth-quarter sales in the company’s technology solutions segment were down by an undisclosed amount because of “revenue recognition timing,” the company said. Technology solutions includes home and commercial technology products. The residential technology brands in the segment include Niles Audio, Xantech, Elan Home Systems, Gefen, Omnimount, Panamax, SpeakerCraft and others.
Gross margins grew in the quarter by almost 2 percentage points to 30.1 percent compared with the year-ago period, but the gain was offset by a higher SG&A expense, “which was partly driven by increased product development spending and consulting costs related to our operational improvement initiatives,” said president/CEO Michael Clarke.
As part of those initiatives, the company will begin building a Nortek manufacturing campus in Mexico in the second quarter. The company “will be consolidating certain of our North American manufacturing and transferring certain products, subassemblies and components into this campus” to “position Nortek as a globally competitive manufacturer,” Clarke said.
The company’s “strategic investments in operational improvements will significantly increase efficiency and reduce operating expenses, both in our manufacturing processes and in our administrative functions,” Clarke added. “A key priority for the next few years is optimizing our manufacturing footprint, distribution network, and supply chain.”
The company recently signed a definitive agreement to acquire 2GIG Technologies, a privately held supplier of residential security and home-automation products.
Nortek’s five business segments include technology solutions, which consists of home and commercial technology products. The other segments are residential ventilation, display mount solutions, residential heating and cooling, and commercial air.