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.