Providence, R.I.
–
increased its first-quarter
net sales by 13 percent to $489 million, but operating
earnings declined and net losses increased from the year-ago quarter.
The sales gain of $58 million was largely due
to last year’s acquisition of companies, whose
sales contributed $51.1 million in the quarter’s sales increase, the company
said.
The parent of multiple residential- and
commercial-system suppliers posted operating earnings of $1.9 million, down
from a year-ago $4.2 million. Rising interest expenses of $29.3 million
compared to year-ago interest expenses $23.6 million yielded a net loss of
$21.1 million, up from a year-ago net loss of $13.4 million.
To cut future interest payments, Nortek
recently refinanced $753 million of 11-percent senior secured notes to reduce
interest payments by about $22 million per year.
Sales
weren’t broken out by commercial and residential segments.
Because
of the results, “Nortek continues to focus on cost
reduction and working capital improvement to maintain and improve margins and
cash flow,” said chairman/CEO Richard Bready.
Though the financial picture wasn’t pretty,
Bready said the company “performed well given challenging market conditions and
rising commodity prices, which have put pressure on both net sales and
operating earnings during our historically weakest quarter.” Residential HVAC
sales were adversely affected by a surge of orders in the fourth quarter of
last year, he added.
In the first
quarter of 2011, he said, U.S. housing starts decreased by 10 percent compared
to the prior year, new home sales decreased by 18 percent, existing home sales
fell 2 percent, and spending on residential improvements fell almost 10
percent. The commercial construction market declined by 12.5 percent in the
first quarter, he added.
Nortek’s residential brands include Niles
Audio, Xantech, Elan, Gefen, Omnimount, Panamax, SpeakerCraft and others.
