Nortek Providence, R.I. - Nortek's sales decline accelerated in
2009, yet its operating losses shrank substantially despite growing losses in
the company's home-technology business segment, Nortek's annual report shows.
Out of Nortek's four business segments, the only one that posted a 2009 operating loss was home-technology products, whose 20 brands include Niles, Elan, Aton and SpeakerCraft. The technology segment's operating loss of $274 million grew almost seven-fold from 2008's $39.2 million operating loss. In 2007, the segment posted operating earnings of $76 million.
Despite surging home-technology losses, company-wide operating losses shrank 71.2 percent to $165.1 million from $573.7 million in 2008, when Nortek's residential ventilation and residential HVAC segments accounted for 99 percent of Nortek's operating losses. Nortek's other business segment is commercial HVAC.
The last time Nortek posted operating earnings was in 2007, when earnings came to $210.3 million.
In December 2009, Nortek emerged from a prepackaged Chapter 11 reorganization, reducing its debt load from about $2.2 billion to about $885.3 million at the end of 2009. The company plans to file an application to list its stock on the New York stock Exchange. If it doesn't meet listing requirements, the company said it will file on another national stock exchange.
In its latest financial report, Nortek said company-wide net sales were off in 2009 by 20.3 percent to $1.81 billion following a 2008 decline of only 4.2 percent. Net sales in each of Nortek's four segments fell at double-digit percentage rates, with home-technology sales off 22 percent to $400.8 million following a 9.8 percent decline in 2008 and a 17.7 percent gain in 2007. Sales in other segments were off in 2009 by 18.6 percent at the low end for residential ventilation products to 22.8 percent on the high end for commercial HVAC products. Home technology accounted for 22.2 percent of company-wide sales in 2009 and 23 percent of 2008.
For the fourth quarter, company-wide net sales were down 14.2 percent to $429 million, and the operating loss shrank to $31.2 million from the year-ago $100.7 million.
In the short term, chairman Richard Bready said, Nortek expects "only marginal improvement in the residential housing market," though the long-term fundamentals "remain solid" because of a growing population and household formations. The company forecast single-family housing starts of 525,000 in 2010. Census Bureau statistics show single-family starts in 2009 were 443,500, down from a 2005 peak of 1.72 million.
The company's financial report also revealed that Bready, who is also president and CEO, received total compensation of $9.7 million in 2009. That includes $a $3.5 million base salary, a $500,000 cash bonus, plus the value of stocks, options and other compensation.
Other brands in the home-technology segment include Proficient Audio Systems, Sunfire, Imerge, Xantech, M&S Systems, Channel Plus, Panamax, Furman, OmniMount, OpenHouse, Channel Plus, Magenta, Gefen and LiteTou