<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
---------------
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 31, 1998
------------------
NORTEK, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-6112 05-0314991
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
50 Kennedy Plaza, Providence, RI 02903-2360
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (401) 751-1600
-----------------------------
N/A
(Former name or former address, if changed since last report)
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
On July 31, 1998, Nortek, Inc. (the "Company") through a wholly owned subsidiary
("Acquisition Sub"), purchased all of the issued and outstanding capital stock
of NuTone, Inc. ("NuTone"), a wholly owned subsidiary of Williams plc for an
aggregate purchase price of $242.5 million. In connection with the acquisition,
the Company assumed NuTone's operating liabilities (other than intercompany
borrowings), including certain liabilities of NuTone concerning post retirement
and other benefit obligations. The purchase price is subject to adjustment based
on NuTone's net asset value determined as of August 1, 1998. If the final
closing net asset value, as determined in accordance with the NuTone purchase
agreement, is within the range of $65,100,000 to $67,100,000 (inclusive), then
there will be no adjustment to the purchase price. If the final closing net
asset value, as determined in accordance with the NuTone purchase agreement,
exceeds $67,100,000, then the Company is obligated to pay Williams plc an amount
equal to the difference between the final closing net asset value and
$67,100,000. If the final closing net asset value is less than $65,100,000, then
Williams plc is obligated to pay the Company an amount equal to the difference
between $65,100,000 and the final closing net asset value. The purchase price
was funded, and any adjustments will be funded, through the use of proceeds from
the sale of $210,000,000 8 7/8% Senior Notes which occurred on July 31, 1998,
together with a portion of the cash proceeds from the sale of 2,182,500 shares
of the Company's common stock which occurred in the second quarter of 1998. The
$210,000,000 8 7/8% Senior Notes were sold in a Rule 144A private offering to
institutional investors.
Consummation of the acquisition was subject to expiration or termination of the
applicable waiting period under the HSR Act. On or about June 29, 1998, after a
review of the acquisition by the Federal Trade Commission ("FTC"), and in
response to the FTC's concerns about the potential adverse competitive effects
the acquisition might have on the market for certain hard-wired intercom
systems, Nortek executed an Agreement Containing Consent Order ("FTC Order")
providing for the divestiture of the Company's M&S System LP ("M&S") subsidiary,
which manufacturers hard-wired
<PAGE> 3
intercom systems. The FTC Order was provisionally accepted by the FTC
commissioners on July 27, 1998. The FTC Order was placed on the public record
on July 27, 1998, and is subject to public comment for a period of 60 days.
Upon the expiration of the comment period, the FTC will decide whether to
withdraw, modify or make final its acceptance of the Order.
Under the terms of the FTC Order, the Company must divest, at no minimum price,
within six months of the execution of the FTC Order, all of the assets,
properties, business and goodwill of M&S (the "M&S Assets"). Any acquirer must
be approved by the FTC. If the Company has not divested the M&S assets within
the prescribed time, the FTC may appoint a trustee to divest the M&S assets. The
Company will be responsible for any costs and expenses incurred by the trustee
that are necessary to carry out the trustee's duties. The Company is required to
file compliance reports showing that it has fully complied with the order.
Violations of the final consent order may result in substantial monetary
penalties, which could have a material adverse effect on the Company's business.
Notwithstanding the FTC Order, at any time after the consummation of the
acquisition, the FTC or the Department of Justice ("DOJ") could take such
actions under the antitrust laws as it deems necessary or desirable in the
public interest, including seeking to enjoin the consummation of the acquisition
or seeking divestiture of certain assets of the acquisition. Furthermore, at any
time after the consummation of the acquisition, any state could take such action
under the antitrust laws as it deems necessary or desirable to the public
interest. While the Company does not expect the FTC, the DOJ or any state to
challenge the acquisition on antitrust grounds, there is no assurance that such
a challenge will not be made or, if made and successful, would not have a
material adverse effect on the Company.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
(a). Financial Statements of Business Acquired
The consolidated financial statements of
Nutone, Inc., and subsidiary as of
December 31, 1997 and April 4, 1998 and
for the year ended December 31, 1997 and
the three months
<PAGE> 4
ended March 29, 1997, and April 4, 1998, together with the notes
thereto.
(b) Pro Forma Information
Unaudited As Adjusted and Pro Forma Adjusted Consolidated Balance
Sheet as of April 4, 1998, together with Pro Forma and Pro Forma
Adjusted Condensed Consolidated Statement of Operations for the year
ended December 31, 1997, and the three and twelve months ended April
4, 1998.
(c) Exhibits
2.1 Stock Purchase and Sale Agreement dated March 9, 1998, between
Williams Y&N Holdings, Inc., and NTK Sub, Inc. (incorporated by
reference to Exhibit 2 to Form 8-K/A filed March 18, 1998, File No.
1-6112).
2.2 Amendments No. 1 through No. 9 to Stock Purchase and Sale Agreement
dated March 9, 1998, between Williams Y&N Holdings, Inc., and NTK Sub,
Inc.
23.1 Consent of Independent Accountants.
<PAGE> 5
Item 7(a) Financial Statements
of Business Acquired
NUTONE INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31, APRIL 4,
1997 1998
------------ -----------
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets:
Cash................................................... $ 840 $ 1,393
Accounts receivable, less allowance for doubtful
accounts of $1,373 and $1,269......................... 30,304 35,065
Inventories............................................ 4,804 4,706
Deferred tax asset, current............................ 4,880 4,900
Prepaid expenses and other current assets.............. 4,688 5,183
--------- ---------
Total current assets.............................. 45,516 51,247
Property, plant and equipment, net.......................... 18,212 18,107
Deferred tax asset, noncurrent.............................. 14,123 14,398
Other noncurrent assets..................................... 289 --
--------- ---------
Total assets...................................... $ 78,140 $ 83,752
========= =========
LIABILITIES
Current liabilities:
Accounts payable....................................... $ 23,134 $ 15,619
Payable to Parent and related entities................. 11,508 24,211
Accrued expenses and other............................. 15,635 14,491
--------- ---------
Total current liabilities......................... 50,277 54,321
Pension liability........................................... 12,883 12,673
Post-retirement medical benefits liability.................. 27,820 28,068
Accrued warranty............................................ 4,990 5,209
Long-term debt to Parent and related entities............... 131,000 131,000
--------- ---------
Total liabilities................................. 226,970 231,271
--------- ---------
Contingencies
SHAREHOLDER'S NET INVESTMENT (DEFICIT)
Shareholder's net investment (deficit)...................... (148,830) (147,519)
--------- ---------
Total liabilities and shareholder's net investment
(deficit)....................................... $ 78,140 $ 83,752
========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 6
NUTONE INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS THREE MONTHS
YEAR ENDED ENDED ENDED
DECEMBER 31, MARCH 29, APRIL 4,
1997 1997 1998
--------------- ------------ ------------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C>
Net sales............................................... $199,072 $46,561 $49,564
Cost of goods sold...................................... (122,897) (28,874) (31,811)
-------- ------- -------
Gross profit.................................. 76,175 17,687 17,753
Selling, general and administrative expenses............ (51,387) (14,322) (13,561)
-------- ------- -------
Income from operations........................ 24,788 3,365 4,192
Other income (expense):
Interest expense................................... (11,852) (3,020) (3,060)
Other income, net.................................. 42 10 18
-------- ------- -------
Income before income taxes.................... 12,978 355 1,150
Provision for income taxes.............................. (5,043) (142) (460)
-------- ------- -------
Net income............................... $ 7,935 $ 213 $ 690
======== ======= =======
Other comprehensive income, net of tax:
Pension liability adjustment....................... 503 251 --
Foreign currency translation adjustment............ (49) -- --
-------- ------- -------
Total other comprehensive income.............. 454 251 --
-------- ------- -------
Comprehensive Income.......................... $ 8,389 $ 464 $ 690
======== ======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 7
NUTONE INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF SHAREHOLDER'S NET INVESTMENT
FOR THE YEAR ENDED DECEMBER 31, 1997
AND THE THREE MONTHS ENDED MARCH 29, 1997 AND APRIL 4, 1998
<TABLE>
<CAPTION>
SHAREHOLDER'S
NET INVESTMENT
(DEFICIT)
--------------
(IN THOUSANDS)
<S> <C>
Balance, December 31, 1996.................................. $(147,062)
Net Income (unaudited)...................................... 213
Pension liability adjustment (unaudited).................... 251
Capital contribution from Parent (unaudited)................ 304
---------
Balance, March 29, 1997 (unaudited)......................... $(146,294)
=========
Balance, December 31, 1996.................................. $(147,062)
Net income.................................................. 7,935
Foreign currency translation adjustment..................... (49)
Pension liability adjustment................................ 503
Capital contribution from Parent............................ 2,243
Dividend to Parent.......................................... (12,400)
---------
Balance, December 31, 1997.................................. (148,830)
Net Income (unaudited)...................................... 690
Capital Contribution from Parent (unaudited)................ 621
---------
Balance, April 4, 1998 (unaudited).......................... $(147,519)
=========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 8
NUTONE INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS THREE MONTHS
YEAR ENDED ENDED ENDED
DECEMBER 31, MARCH 29, APRIL 4,
1997 1997 1998
---------------- ------------ ------------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income.................................... $ 7,935 $ 213 $ 690
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense.......................... 3,416 863 835
Deferred tax provision........................ (555) (439) (295)
Loss on sale of fixed assets.................. 16 (2) 6
(Increase) Decrease in accounts receivable.... 3,604 2,886 (4,761)
(Increase) Decrease in inventories............ (1,065) (1,035) 98
(Increase) Decrease in prepaid expenses and
other current assets........................ 339 103 (495)
Increase (Decrease) in accounts payable....... 3,784 (3,617) (7,515)
Increase in accrued expenses.................. 583 (579) (925)
Increase (Decrease) in pension liability...... (1,119) 158 79
Increase (Decrease) in post-retirement medical
benefit liability........................... 1,018 259 248
--------- -------- --------
Net cash provided by operating
activities............................. 17,956 (1,190) (12,035)
--------- -------- --------
Cash flows from investment activities:
Proceeds from sale of fixed assets............ 11 7 5
Capital expenditures.......................... ( 3,663) (895) (741)
--------- -------- --------
Net cash used in investing activities.... ( 3,652) (888) (736)
--------- -------- --------
Cash flows from financing activities:
Dividends paid to Parent...................... (12,400) -- --
Contributions from Parent and related
entities.................................... 2,243 304 621
Change in amount due to/from Parent and
related entities............................ (4,250) 2,135 12,703
Foreign currency translation adjustment....... (49) -- --
--------- -------- --------
Net cash used in financing activities.... (14,456) 2,439 13,324
--------- -------- --------
Net increase (decrease) in cash.................... (152) 361 553
Cash at beginning of year.......................... 992 992 840
--------- -------- --------
Cash at end of year................................ $ 840 $ 1,353 $ 1,393
========= ======== ========
Supplemental cash flow information:
Cash paid for interest........................ $ 12,141 $ 323 $ 34
========= ======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 9
NUTONE INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. PURPOSE OF FINANCIAL STATEMENTS:
The financial statements of NuTone Inc. and Subsidiary (the "Company") have
been prepared in connection with the proposed sale of the capital stock of the
Company by its ultimate parent company, Williams plc ("Williams" or the
"Parent"), a U.K. Company, to Nortek, Inc., pursuant to an agreement dated March
9, 1998.
The consolidated financial statements include the accounts of NuTone Inc.
(U.S.) and its wholly owned subsidiary, NuTone Canada Inc.
Certain properties, while historically part of the Company, have been
excluded from these financial statements, as the related assets, liabilities and
costs will not be a part of the proposed transaction. These properties, at
December 31, 1997, are non-operating and are not material to the Company's
financial position or 1997 results of operations.
2. NATURE OF BUSINESS:
The Company is principally engaged in the manufacturing and sale of
household fixtures, such as ventilation fans and heaters, range hoods, door
chimes, bathroom cabinets, and intercom systems. The Company's primary
manufacturing operations are located in Cincinnati, Ohio and the Company also
has a manufacturing facility in Coppell, Texas. Approximately 99% of its 1997
sales were to customers in the United States and Canada.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the significant accounting policies followed
in the preparation of these consolidated financial statements.
a. Basis of Presentation: The Company's consolidated financial
statements, which have been prepared on the basis of U.S. generally accepted
accounting principles, reflect the actual results of operations, financial
position, changes in shareholder's net investment, and cash flows as if it were
a separate stand-alone entity for all periods presented. The financial
statements do not reflect the goodwill resulting from the acquisition of the
Company by Williams in 1991, as "push down accounting" has not been utilized.
General corporate overhead expenses related to Williams' corporate
headquarters and common support functions have been allocated to the Company, to
the extent such amounts are applicable to the Company, based on the ratio of the
Company's budgeted sales to budgeted sales of all companies within the Williams
U.S. consolidated group. Management believes these allocations are reasonable.
However, the costs of these services charged to the Company are not necessarily
indicative of the costs that would have been incurred if the Company had
performed these functions as a stand-alone entity. As a result of the proposed
sale described in Note 1, the Company, or the acquirer, will be required to
perform certain of these functions using its own resources, or purchased
services, and will be responsible for the costs and expenses associated with the
management of the Company.
The financial information included herein may not necessarily reflect the
consolidated results of operations, financial position and cash flows of the
Company which would have resulted had the Company been a separate, stand-alone
entity during the period presented.
b. Basis of Consolidation: The consolidated financial statements include
the accounts of NuTone Inc. and its wholly-owned subsidiary, NuTone Canada Inc.
All significant intercompany transactions and accounts have been eliminated.
c. Foreign Currency Translation: For international operations, assets and
liabilities are translated into U.S. dollars at year-end exchange rates, and
revenues and expenses are translated at average exchange rates
<PAGE> 10
NUTONE INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
prevailing during the year. Translation adjustments, resulting from fluctuations
in exchange rates, are included in shareholder's net investment.
d. Use of Estimates: The preparation of consolidated financial statements
in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
e. Research and Development Expenses: Research and development expenses
are charged to operations as incurred. Research and development expense was
approximately $1,377,000 for the year ended December 31, 1997.
f. Inventories: Inventories are stated at the lower of cost or market,
with cost being determined on the last in, first out (LIFO) method.
g. Property, Plant and Equipment: Property, plant and equipment,
including the cost of certain tooling, is recorded at cost and depreciated on
the straight-line basis over the following useful lives:
<TABLE>
<S> <C>
Buildings................................................... 40 years
Building improvements....................................... 10 years
Machinery and equipment..................................... 4 to 10 years
Furniture, fixtures and computer equipment.................. 5 to 10 years
Tools and dies.............................................. 5 years
</TABLE>
Repairs and maintenance expenditures are charged to income as incurred,
whereas replacements, betterments and improvements are capitalized. Upon sale or
retirement, the cost and related accumulated depreciation are eliminated from
the respective accounts and the resulting gain or loss is included in
operations.
h. Product Warranty Expense: The estimated amount of product warranty
costs is accrued in the period in which the related sale is made.
i. Advertising Costs: The Company expenses advertising costs the first
time the advertising takes place. Advertising expense was $4,942,000 for the
year ended December 31, 1997.
j. Income Taxes: The Company's operations have historically been included
in the income tax returns filed by a subsidiary of Williams. However, income tax
expense in the Company's consolidated financial statements has been calculated
as if the Company had filed separate tax returns for all periods presented.
The Company is a member of a consolidated U.S. tax group. Under a tax
sharing agreement with intermediate and ultimate parent companies, the Company
is not charged for taxes on its operations. The Company's current tax provision
has been accounted for as a capital contribution.
k. Statement of Cash Flows: The Company considers all highly liquid debt
instruments purchased with a maturity of three months or less to be cash
equivalents.
<PAGE> 11
NUTONE INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
4. INVENTORIES:
At December 31, 1997, inventories were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Raw materials and work-in-process........................... $13,738
Finished goods.............................................. 14,665
-------
28,403
Less reserve for LIFO valuation............................. 23,599
-------
Total inventories................................. $ 4,804
=======
</TABLE>
5. PROPERTY, PLANT AND EQUIPMENT:
At December 31, 1997, property, plant and equipment consisted of:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Land, building and improvements............................. $13,828
Machinery and equipment..................................... 20,697
Furniture, fixtures and computer equipment.................. 5,997
Tools and dies.............................................. 13,999
Construction in progress.................................... 3,150
-------
57,671
Less accumulated depreciation............................... 39,459
-------
$18,212
=======
</TABLE>
6. LONG-TERM DEBT TO SUBSIDIARY OF PARENT COMPANY:
The Company has a promissory note payable to a wholly-owned subsidiary of
the Parent of $131,000,000, due on September 7, 2001. Interest is paid in
semi-annual installments in June and December at a rate of 8.5%.
7. EMPLOYEE BENEFIT PLANS:
The Company has a defined contribution plan covering predominantly
non-union employees of NuTone Inc. (U.S.). Under the Plan, participants can
elect to defer up to 10% of their eligible earnings on a pre-tax basis, with the
Company matching 50% of the first 5% of deferred earnings. During 1997, the
Company's contribution to the plan was $347,000.
The Company has six noncontributory defined benefit pension plans (the
"Plans") covering substantially all employees, with benefits for salaried
employees based on years of service and the employee's career compensation, and
benefits for hourly paid employees based on years of service. The Company
accrues expense for the Plans in accordance with generally accepted accounting
principles and makes contributions to the Plans in accordance with an agreed
funding policy, which are deductible for federal income tax purposes.
At December 31, 1997, substantially all of the assets of the defined
benefit plans were included with those of other Williams subsidiaries in the
United States and held as part of a master trust. Plan assets, as stated below,
represent the Company's proportionate share of the net assets of the master
trust.
<PAGE> 12
NUTONE INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table sets forth the principal Plans' funded status and
amounts recognized in the Company's balance sheet, utilizing information from
the latest actuarial valuation date, December 31, 1997:
<TABLE>
<CAPTION>
NUTONE NUTONE
(U.S.) (U.S.)
SALARIED HOURLY
-------- -------
(IN THOUSANDS)
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, primarily vested....... $42,851 $25,383
======= =======
Projected benefit obligation for services rendered to
date...................................................... $46,816 $25,383
Plan assets at fair value, primarily cash equivalents and
marketable securities..................................... 37,350 23,086
------- -------
Projected benefit obligation in excess of plan assets....... 9,466 2,297
Unrecognized net gain (loss) from past experience different
from that assumed and effects of changes in assumptions... 3,920 723
Unrecognized prior service cost............................. -- (1,012)
Additional minimum liability................................ -- 289
------- -------
Accrued pension liability................................... $13,386 $ 2,297
======= =======
</TABLE>
The deferred tax asset associated with employee pensions and other benefits
is disclosed in Note 9.
Net pension expense, reflected in both cost of sales and general and
administrative expenses, for the year ended December 31, 1997, included the
following components:
<TABLE>
<CAPTION>
NUTONE NUTONE
(U.S.) (U.S.)
SALARIED HOURLY
-------- -------
(IN THOUSANDS)
<S> <C> <C>
Service cost................................................ $ 910 $ 363
Interest cost............................................... 3,335 1,851
Actual return on plan assets................................ (4,424) (2,637)
Net amortization and deferral............................... 1,374 906
------- -------
Net pension expense......................................... $ 1,195 $ 483
======= =======
</TABLE>
For 1997, the discount rate and rate of increase in future compensation
levels used in determining the actuarial present value of the projected benefit
obligation was 7.5% and 4.5%, respectively. The expected long-term rate of
return on assets was 9%.
8. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS:
The Company provides certain medical and life insurance benefits to
eligible retired employees. Hourly employees at the Cincinnati, Ohio location
covered by a collective bargaining agreement, hired before June 12, 1992, and
non-union employees, hired before January 1, 1994, generally become eligible for
retiree medical and life insurance benefits on retirement. Pre-age 65 retirees
are paid covered medical expenses, including drugs, less deductibles or
co-payments. Post-age 65 retiree medical expenses are offset by Medicare
benefits.
<PAGE> 13
NUTONE INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table sets forth the funded status and amounts recognized in
the Company's balance sheet at December 31, 1997:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Accumulated postretirement benefit obligation:
Retirees.................................................. $17,234
Fully eligible active participants........................ 5,347
Other active participants................................. 5,084
-------
Total unfunded accumulated postretirement benefit
obligation...................................... 27,665
Unrecognized net gain....................................... 1,555
-------
Accrued postretirement benefit obligation................. $29,220
=======
</TABLE>
The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation was 8% in 1997, declining by 1% in 1998 and
declining by 0.5% thereafter through 2004 to an ultimate rate of 4.0%. If the
health care cost trend rate assumptions were increased by 1%, the accumulated
postretirement benefit obligation, as of December 31, 1997, would have increased
by $3,570,000. The effect of this change on the sum of the service cost and
interest cost components of net periodic postretirement benefit cost for 1997
would have been an increase of $381,000.
The deferred tax asset associated with employee pensions and other benefits
is disclosed in Note 9.
The components of net periodic postretirement benefit cost for the year
ended December 31, 1997 were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Service cost................................................ $ 431
Interest cost on accumulated post retirement benefit
obligation................................................ 2,064
Net amortization............................................ (26)
------
Total expense..................................... $2,469
======
</TABLE>
The discount rate used in determining the accumulated postretirement
benefit obligation and net periodic postretirement benefit cost was 7.5% as of
December 31, 1997.
9. INCOME TAXES:
The following table presents the principal components of the difference
between the U.S. federal statutory income tax rate and the effective tax rate
for the year ended December 31, 1997:
<TABLE>
<S> <C>
Federal income tax rate..................................... 35%
Tax effect of foreign losses................................ (1)%
Effect of state and local taxes, net of federal tax......... 5%
---
Effective tax rate.......................................... 39%
===
</TABLE>
The Company's tax provision includes a provision for income taxes in foreign tax
jurisdictions.
<PAGE> 14
NUTONE INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table presents the U.S. and foreign components of income tax
expense for the year ended December 31, 1997:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Income tax expense (benefit):
Current:
Federal........................................... $ 4,327
State and local................................... 1,256
Foreign........................................... 15
Deferred:
Federal........................................... (443)
State and local................................... (112)
-------
Total income tax expense..................... $ 5,043
=======
</TABLE>
Deferred income tax liabilities are taxes that the Company expects to pay
in future periods. Conversely, deferred income tax assets are tax benefits
recognized for expected reductions in future taxes payable. Deferred income
taxes arise because of differences in the financial reporting and tax bases of
certain assets and liabilities. Deferred income tax assets and liabilities
included in the balance sheet at December 31, 1997 were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Deferred income tax assets:
Employee pensions and other benefits................... $17,804
Accrued warranty....................................... 2,996
Balance sheet reserves and allowances..................... 3,258
-------
Total deferred income tax assets.................. 24,058
-------
Deferred income tax liabilities:
Property, plant, and equipment......................... 3,997
Accounts receivable.................................... 1,058
-------
Total deferred income tax liabilities............. 5,055
-------
Total net deferred income tax assets.............. $19,003
=======
</TABLE>
10. LEASES:
The Company leases manufacturing and warehouse facilities and other
equipment under various operating leases. Total rent expense for the year ended
December 31, 1997 was approximately $1,309,000.
Future minimum rental payments required under all leases that have
remaining noncancelable lease terms in excess of one year, as of December 31,
1997, are as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
1998........................................................ $ 995
1999........................................................ 1,053
2000........................................................ 616
2001........................................................ 424
Thereafter.................................................. --
-------
Total minimum payments required........................ $ 3,088
=======
</TABLE>
<PAGE> 15
NUTONE INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
11. RELATED PARTY TRANSACTIONS:
Management fees charged to the Company by its Parent in 1997 were
$1,676,000.
The Company maintains a revolving loan with a fellow wholly-owned
subsidiary of the Parent. The loan has no stated due date and is due and payable
upon demand by this subsidiary. The Company is charged interest on outstanding
balances, based on the prime rate (8.5% at December 31, 1997), which is payable
monthly. In situations where the Company has advanced funds to this subsidiary,
it receives interest at the prime rate less 1%. Interest expense, net of
interest income, on this revolving loan and on the long-term debt discussed in
Note 6, was $11,852,000 in 1997.
12. MAJOR CUSTOMER:
The Company derived approximately 22% of its consolidated net sales from
one customer in 1997.
13. CONTINGENCIES:
The Company is subject to various investigations, claims and legal
proceedings covering a wide range of matters that arise in the ordinary course
of its business activities. Each of these matters is subject to various
uncertainties, and it is possible that some of these matters may be resolved
unfavorably to the Company. The Company has established accruals for matters
that are probable and reasonably estimable. Management believes that any
liability that may ultimately result from the resolution of these matters in
excess of amounts provided will not have a material adverse effect on the
financial position or results of operations of the Company.
14. INTERIM FINANCIAL STATEMENTS (UNAUDITED):
The consolidated financial statements of NuTone Inc. and Subsidiary, in the
opinion of Management, include all adjustments necessary for a fair presentation
of the results of operations, financial position and cash flows for each period
shown. All adjustments are of a normal and recurring nature. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to SEC rules and regulations. It is suggested that these
financial statements be read in conjunction with the consolidated year end
financial statements and notes thereto included in the Company's Report on Audit
of Consolidated Financial Statements as of December 31, 1997 and for the year
then ended.
The Company has adopted Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income" (SFAS 130), in the first quarter of 1998.
SFAS 130 establishes standards for reporting and displaying comprehensive income
and its components in a full set of financial statements. The objective of SFAS
130 is to report a measure of all changes in the equity of an enterprise that
result from transactions and other economic events of the period other than
transactions with shareowners.
The Financial Accounting Standards Board issued Statements of Financial
Standards No. 131, "Disclosure about Segments of an Enterprise and Related
Information", and No. 132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits". The Company has not yet determined what effect, if
any, these statements will have.
<PAGE> 16
COOPERS & LYBRAND LETTERHEAD
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Williams Y&N Holdings, Inc.
Parent of NuTone Inc. and Subsidiary
We have audited the accompanying consolidated balance sheet of NuTone Inc.
and Subsidiary (the "Company") as of December 31, 1997, and the related
consolidated statements of operations, shareholder's net investment and cash
flows for the year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of NuTone Inc. and
Subsidiary as of December 31, 1997 and the consolidated results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Cincinnati, Ohio
February 20, 1998
<PAGE> 17
Item 7(b) ProForma Information
UNAUDITED PRO FORMA AND PRO FORMA ADJUSTED
CONDENSED CONSOLIDATED FINANCIAL DATA
OVERVIEW
The Unaudited Pro Forma and Pro Forma Adjusted Condensed Consolidated
Financial Data for the year ended December 31, 1997 and the three and twelve
months ended April 4, 1998 presented herein gives pro forma effect to certain
transactions. Transactions for which pro forma information is provided include
the sale of $175,000,000 principal amount of 9 1/4% Senior Notes, due March 15,
2007 by the Company (the "9 1/4% Notes"), the sale of $310,000,000 principal
amount of 9 1/8% Senior Notes, due September 1, 2007 by the Company (the "9 1/8%
Notes"), the acquisition of Ply Gem Industries, Inc. ("Ply Gem") in a tender
offer for a share price of $19.50 per outstanding share of common stock by the
Company (the "Ply Gem Acquisition"), the sale of 2,182,500 shares of Company
common stock for net proceeds of approximately $64,300,000 (the "Common Stock
Offering"), the sale of $210,000,000 principal amount of 8 7/8% Senior Notes,
due August 1, 2008 by the Company (the "8 7/8% Notes") and the purchase of all
of the issued and outstanding capital stock of NuTone, Inc. ("NuTone"), a wholly
owned subsidiary of Williams plc for an aggregate purchase price of
$242,500,000, subject to adjustment based on NuTone's net asset value on August
1, 1998 as defined in the NuTone purchase agreement (the "NuTone Acquisition").
The Ply Gem Acquisition and the NuTone Acquisition are accounted for under
the purchase method of accounting. With respect to these acquisitions, the
information contained herein has been prepared utilizing preliminary purchase
price allocations which are subject to refinement until all pertinent
information regarding the acquisitions has been obtained. In addition, any cost
reductions reflected herein are estimates. The ability to implement such cost
reductions could be beyond the control of Nortek, and no assurance can be given
that such cost reductions will be achieved. Consequently, actual results could
differ materially from those presented. Accordingly, the financial information
presented herein is subject to change.
The financial information entitled "Unaudited Pro Forma" and "Unaudited Pro
Forma Adjusted" is not necessarily indicative of the actual results of
operations that would have been reported if the events described above had
occurred during the applicable period, nor does such information purport to be
indicative of the results of future operations. Furthermore, such information
may not give effect to all cost savings or incremental costs that may occur as a
result of the integration and consolidation of the acquisitions of Ply Gem and
NuTone. In the opinion of management, all adjustments necessary to present
fairly, in all material respects, such "Unaudited Pro Forma" and "Unaudited Pro
Forma Adjusted" financial information have been made.
During the second quarter of 1998, the Company sold several nonstrategic
assets of Ply Gem including Studley, Sagebrush and Goldenberg. In addition,
Nortek has entered into a letter of intent for the sale of the Electronics Group
subject to the completion of satisfactory due diligence by the purchaser,
expiration or termination of the applicable waiting period under the HSR Act and
the negotiation of definitive documentation, which is expected to contain
customary terms and conditions. In addition, under the Proposed FTC Order, the
disposition of M&S, which is included in the Electronics Group, is subject to
the prior approval of the FTC. The following Pro Forma and Pro Forma Adjusted
Condensed Consolidated Financial Data does not give effect to the dispositions
of businesses that have occurred in 1998 or may occur in the future.
It is suggested that the Unaudited Pro Forma and Pro Forma Adjusted
Condensed Consolidated Financial Data be read in conjunction with the Financial
Statements and the Notes included in the Company's latest Annual Report on Form
10-K/A and latest quarterly Financial Statements on Form 10-Q and the audited
and unaudited NuTone Consolidated Financial Statements and the Notes thereto
included elsewhere herein.
UNAUDITED AS ADJUSTED AND PRO FORMA ADJUSTED CONSOLIDATED BALANCE SHEET
The Unaudited As Adjusted Consolidated Balance Sheet as of April 4, 1998
has been prepared based upon the unaudited Consolidated Balance Sheet of Nortek
as of April 4, 1998 and gives effect to the Common Stock Offering, as if such
transaction had occurred on April 4, 1998.
The Unaudited Pro Forma Adjusted Consolidated Balance Sheet as of April 4,
1998 has been prepared based upon the unaudited Consolidated Balance Sheets of
Nortek and of NuTone as of April 4, 1998 and gives pro forma effect to the
Common Stock Offering, the 8 7/8% Notes and the NuTone Acquisition, in each case
as if such transactions had occurred on April 4, 1998.
<PAGE> 18
UNAUDITED PRO FORMA AND PRO FORMA ADJUSTED CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE PLY GEM ACQUISITION
The Unaudited Pro Forma (for Ply Gem) Condensed Consolidated Statement of
Operations for the year ended December 31, 1997 and twelve months ended April 4,
1998 have been prepared using Nortek's Audited Consolidated Statement of
Operations for the year ended December 31, 1997 (which includes the operations
of Ply Gem since August 26, 1997), and Nortek's Unaudited Condensed Consolidated
Statements of Operations for the three months ended April 4, 1998 and March 29,
1997, as applicable, and Ply Gem's results of operations for the period from
January 1, 1997 through August 25, 1997, as applicable.
The Unaudited Pro Forma (for Ply Gem) Condensed Consolidated Statement of
Operations for the year ended December 31, 1997 and the twelve months ended
April 4, 1998 give pro forma effect to, as applicable: (i) the 9 1/4% Notes;
(ii) the 9 1/8% Notes; (iii) the Ply Gem Acquisition; (iv) cost savings that are
directly attributable to the Ply Gem Acquisition (the "Ply Gem Acquisition
Related Cost Savings"); (v) the Common Stock Offering; and (vi) approximately
$22.2 million of charges recorded by Ply Gem prior to the Ply Gem Acquisition,
to provide certain valuation reserves and to conform accounting policies to
Nortek's, in each case as if such events occurred on January 1, 1997
(collectively, the "Pro Forma Ply Gem Adjustments").
The information entitled "Pro Forma Adjusted Nortek and Ply Gem" gives pro
forma effect to the Pro Forma Ply Gem Adjustments and additional estimated cost
savings related to the Ply Gem Acquisition which were achieved through actions
taken by Nortek since the completion of the Ply Gem Acquisition (the "Ply Gem
Acquisition Additional Cost Savings") and excludes the effect of approximately
$22.2 million of charges recorded by Ply Gem prior to the Ply Gem Acquisition as
described above.
UNAUDITED PRO FORMA AND PRO FORMA ADJUSTED STATEMENT OF OPERATIONS FOR THE PLY
GEM ACQUISITION AND THE NUTONE ACQUISITION
The Unaudited Pro Forma (for Ply Gem and NuTone) Condensed Consolidated
Statement of Operations for the year ended December 31, 1997 and the three and
twelve months ended April 4, 1998 have been prepared using, as applicable: (i)
Nortek's Audited Consolidated Statement of Operations for the year ended
December 31, 1997 (which includes the operations of Ply Gem from August 26, 1997
to December 31, 1997); (ii) Ply Gem's Unaudited Results of Operations for the
period January 1, 1997 through August 25, 1997; (iii) NuTone's Audited
Consolidated Statement of Operations for the year ended December 31, 1997; (iv)
Nortek's Unaudited Condensed Consolidated Statements of Operations for the three
months ended April 4, 1998 and March 29, 1997; and (v) NuTone's Unaudited
Condensed Consolidated Statements of Operations for the three months ended April
4, 1998 and March 29, 1997.
The information entitled "Pro Forma Company" gives effect to: (i) the Pro
Forma Ply Gem Adjustments; (ii) the NuTone Acquisition; (iii) net savings
expected to be achieved from the elimination of fees and charges paid by NuTone
to Williams plc and related entities; and (iv) the 8 7/8% Notes.
The information entitled "Pro Forma Adjusted Company" for the year ended
December 31, 1997 and twelve months ended April 4, 1998 gives pro forma effect
to items (i) through (iv) of the immediately preceding paragraph, the Ply Gem
Acquisition Additional Cost Savings and approximately $15.0 million in annual
cost reductions that Nortek estimates can be achieved as a result of the NuTone
Acquisition and excludes the effect of approximately $22.2 million of charges
recorded by Ply Gem prior to the Ply Gem Acquisition as described above.
The information entitled "Pro Forma Adjusted Company" for the three months
ended April 4, 1998 gives pro forma effect to items (ii) through (iv) described
in the second preceding paragraph above and approximately $3.8 million in cost
reductions that Nortek estimates can be achieved as a result of the NuTone
Acquisition.
<PAGE> 19
UNAUDITED AS ADJUSTED AND
PRO FORMA ADJUSTED CONSOLIDATED BALANCE SHEET
APRIL 4, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE PRO FORMA
NORTEK COMMON NORTEK NUTONE PRO FORMA ADJUSTED
HISTORICAL STOCK OFFERING AS ADJUSTED HISTORICAL ADJUSTMENTS COMPANY
---------- -------------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents........ $ 81,091 $64,290(a) $ 145,381 $ 1,393 ($ 46,258)(a) $ 100,516
Marketable securities available
for sale....................... 22,210 -- 22,210 -- -- 22,210
Restricted cash and marketable
securities..................... 6,368 -- 6,368 -- -- 6,368
Accounts receivable, net......... 204,487 -- 204,487 35,065 -- 239,552
Inventories, net................. 186,902 -- 186,902 4,706 23,627(b) 215,235
Prepaid expenses................. 11,705 -- 11,705 5,183 -- 16,888
Other current assets............. 10,854 -- 10,854 -- -- 10,854
Net assets of discounted
operation...................... 27,065 -- 27,065 -- -- 27,065
Prepaid income taxes............. 46,800 -- 46,800 4,900 (9,451)(c) 42,249
---------- ------- ---------- ---------- --------- ----------
Total current assets..... 597,482 64,290 661,772 51,247 (32,082) 680,937
Property, plant and equipment,
net............................ 240,132 -- 240,132 18,107 -- 258,239
Goodwill......................... 375,639 -- 375,639 -- 227,132(d) 602,771
Intangible assets................ 8,477 -- 8,477 -- -- 8,477
Notes receivable and other
investments.................... 9,848 -- 9,848 -- -- 9,848
Deferred income taxes............ 10,476 -- 10,476 14,398 -- 24,874
Deferred debt expense............ 20,556 -- 20,556 -- 6,504(e) 27,060
Other assets..................... 19,896 -- 19,896 -- -- 19,896
---------- ------- ---------- ---------- --------- ----------
Total assets............. $1,282,506 $64,290 $1,346,796 $ 83,752 $ 201,554 $1,632,102
========== ======= ========== ========== ========= ==========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Notes payable and other short
term obligations............... $ 13,427 $ -- $ 13,427 $ -- $ -- $ 13,427
Intercompany borrowings.......... -- -- -- 24,211 (24,211)(f) --
Current maturities of long-term
debt and capital leases........ 5,898 -- 5,898 -- -- 5,898
Accounts payable................. 115,534 -- 115,534 15,619 -- 131,153
Accrued expenses and taxes,
net............................ 126,345 -- 126,345 14,491 -- 140,836
---------- ------- ---------- ---------- --------- ----------
Total current
liabilities............ 261,204 -- 261,204 54,321 (24,211) 291,314
Other long term liabilities...... 64,152 -- 64,152 45,950 -- 110,102
Notes, mortgages, capital leases
and obligations payable less
current maturities............. 833,459 -- 833,459 -- 209,246(g) 1,042,705
Long-term intercompany
borrowings..................... -- -- -- 131,000 (131,000)(h) --
Preferred stock.................. -- -- -- -- -- --
Common stock..................... 16,213 2,183(i) 18,396 -- -- 18,396
Special common stock............. 865 -- 865 -- -- 865
Additional paid in capital....... 136,736 62,107(j) 198,843 -- -- 198,843
Retained earnings (deficit)...... 60,266 -- 60,266 -- -- 60,266
Cumulative translation, pension
and other...................... (6,033) -- (6,033) -- -- (6,033)
Treasury stock-common............ (82,399) -- (82,399) -- -- (82,399)
Treasury stock-special common.... (1,957) -- (1,957) -- -- (1,957)
---------- ------- ---------- ---------- --------- ----------
Total stockholders'
investment............. 123,691 64,290 187,981 (147,519) 147,519(k) 187,981
---------- ------- ---------- ---------- --------- ----------
Total liabilities and
stockholders'
investment......... $1,282,506 $64,290 $1,346,796 $ 83,752 $ 201,554 $1,632,102
========== ======= ========== ========== ========= ==========
</TABLE>
See Notes to the Unaudited As Adjusted Pro Forma and Pro Forma Adjusted
Consolidated Balance Sheet
<PAGE> 20
NOTES TO THE UNAUDITED AS ADJUSTED AND
PRO FORMA ADJUSTED CONSOLIDATED BALANCE SHEET
APRIL 4, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE
COMMON STOCK PRO FORMA
OFFERING ADJUSTMENTS
------------ -----------
<S> <C> <C>
(a) CASH AND CASH EQUIVALENTS
Net proceeds from the Common Stock Offering................. $64,290 $ --
=======
Cash payment related to the NuTone Acquisition.............. (245,500)
Fees, expenses and other costs related to the NuTone
Acquisition and the 8 7/8% Notes.......................... (10,004)
---------
(255,504)
---------
Less gross proceeds from the 8 7/8% Notes .................. 209,246
---------
A portion of the cash proceeds from the Common Stock
Offering, used to partially fund the NuTone Acquisition... $ (46,258)
=========
(b) INVENTORIES, NET
Increase in inventories to estimated fair market value in
connection with the NuTone Acquisition.................... $ 23,627
=========
(c) DEFERRED INCOME TAXES
Deferred income taxes related to the NuTone Acquisition..... $ (9,451)
=========
(d) GOODWILL
Additional costs in excess of net assets acquired in
connection with the NuTone Acquisition.................... $ 227,132
=========
(e) DEFERRED DEBT EXPENSE
Financing costs related to the 8 7/8% Notes................. $ 6,504
=========
(f) INTERCOMPANY BORROWINGS
Eliminate intercompany borrowings not assumed in connection
with the NuTone Acquisition............................... $ (24,211)
=========
(g) NOTES, MORTGAGES, CAPITAL LEASES AND OBLIGATIONS PAYABLE
LESS CURRENT MATURITIES
Issuance of the 8 7/8% Notes................................ $ 209,246
=========
(h) LONG-TERM INTERCOMPANY BORROWINGS
Eliminate intercompany borrowings not assumed in connection
with the NuTone Acquisition............................... $(131,000)
=========
(i) COMMON STOCK
Sale of 2,182,500 shares of Common Stock, $1.00 par value
per share................................................. $ 2,183
=======
(j) ADDITIONAL PAID-IN CAPITAL
Additional paid-in capital related to the Common Stock
Offering.................................................. $62,107
=======
(k) TOTAL STOCKHOLDERS' INVESTMENT
Eliminate NuTone's stockholders' deficit in connection with
the NuTone Acquisition.................................... $ 147,519
=========
</TABLE>
<PAGE> 21
UNAUDITED PRO FORMA AND PRO FORMA ADJUSTED(FOR PLY GEM AND NUTONE)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
NORTEK PRO FORMA
AND NUTONE PRO FORMA PRO FORMA ADDITIONAL ADJUSTED
PLY GEM HISTORICAL ADJUSTMENTS COMPANY ADJUSTMENTS COMPANY
--------- ---------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net sales....................... $1,650,052 $199,072 $ -- $1,849,124 $ -- $1,849,124
Cost and expenses:
Cost of products sold....... 1,256,349 122,897 -- 1,379,246 (11,500)(e) 1,367,746
Amortization of acquired
goodwill.................. 11,090 -- 5,678(a) 16,768 -- 16,768
Selling, general and
administrative expense.... 311,542 51,387 (1,746)(b) 361,183 (39,761)(f) 321,422
---------- -------- ------- ---------- -------- ----------
1,578,981 174,284 3,932 1,757,197 (51,261) 1,705,936
---------- -------- ------- ---------- -------- ----------
Operating earnings (loss)....... 71,071 24,788 (3,932) 91,927 51,261 143,188
Interest expense................ (77,793) (11,852) (7,483)(c) (97,128) -- (97,128)
Investment income............... 7,489 42 -- 7,531 -- 7,531
---------- -------- ------- ---------- -------- ----------
Earnings (loss) from continuing
operations before provision
(benefit) for income taxes.... 767 12,978 (11,415) 2,330 51,261 53,591
Provision (benefit) for income
taxes......................... 2,271 5,043 (1,470)(d) 5,844 19,720(g) 25,564
---------- -------- ------- ---------- -------- ----------
Earnings (loss) from continuing
operations.................... $ (1,504) $ 7,935 $(9,945) $ (3,514) $ 31,541 $ 28,027
========== ======== ======= ========== ======== ==========
EARNINGS (LOSS) PER SHARE AS
ADJUSTED FOR THE COMMON STOCK
OFFERING:
Earnings (loss) from continuing
operations:
Basic....................... $ (.13) $ (.30) $ 2.38
Diluted..................... (.13) (.30) 2.33
Weighted average number of
shares:
Basic....................... 11,788 11,788 11,788
Diluted..................... 12,038 12,038 12,038
</TABLE>
See Notes to the Unaudited Pro Forma and Pro Forma Adjusted (For Ply Gem and
Nutone) Condensed Consolidated Statement of Operations
<PAGE> 22
UNAUDITED PRO FORMA AND PRO FORMA ADJUSTED (FOR PLY GEM AND NUTONE)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THREE MONTHS ENDED APRIL 4, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NORTEK PRO FORMA
AS NUTONE PRO FORMA PRO FORMA ADDITIONAL ADJUSTED
ADJUSTED HISTORICAL ADJUSTMENTS COMPANY ADJUSTMENTS COMPANY
-------- ---------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net sales....................... $ 392,468 $ 49,564 $ -- $ 442,032 $ -- $ 442,032
Cost and expenses:
Cost of products sold....... 294,654 31,811 -- 326,465 -- 326,465
Amortization of acquired
goodwill.................. 2,560 -- 1,420(a) 3,980 -- 3,980
Selling, general and
administrative expense.... 75,561 13,561 (482)(b) 88,640 (3,750)(f) 84,890
---------- -------- ------- ---------- -------- ----------
372,775 45,372 938 419,085 (3,750) 415,335
---------- -------- ------- ---------- -------- ----------
Operating earnings (loss)....... 19,693 4,192 (938) 22,947 3,750 26,697
Interest expense................ (19,458) (3,060) (1,774)(c) (24,292) -- (24,292)
Investment income............... 2,265 18 -- 2,283 -- 2,283
---------- -------- ------- ---------- -------- ----------
Earnings (loss) from continuing
operations before provision
for income taxes.............. 2,500 1,150 (2,712) 938 3,750 4,688
Provision for income taxes...... 1,200 460 (279)(d) 1,381 1,500(g) 2,881
---------- -------- ------- ---------- -------- ----------
Earnings (loss) from continuing
operations.................... $ 1,300 $ 690 $(2,433) $ (443) $ 2,250 $ 1,807
========== ======== ======= ========== ======== ==========
EARNINGS PER SHARE AS ADJUSTED
FOR THE COMMON STOCK OFFERING:
Earnings from continuing
operations:
Basic....................... $ .11 $ (.04) $ .15
Diluted..................... .11 (.04) .15
Weighted average number of
shares:
Basic....................... 11,723 11,723 11,723
Diluted..................... 11,893 11,893 11,893
</TABLE>
See Notes to the Unaudited Pro Forma and Pro Forma Adjusted (For Ply Gem and
NuTone) Condensed Consolidated Statement of Operations
<PAGE> 23
UNAUDITED PRO FORMA AND PRO FORMA ADJUSTED (FOR PLY GEM AND NUTONE)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED APRIL 4, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
NORTEK PRO FORMA
AND NUTONE PRO FORMA PRO FORMA ADDITIONAL ADJUSTED
PLY GEM HISTORICAL ADJUSTMENTS COMPANY ADJUSTMENTS COMPANY
--------- ---------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net sales....................... $1,685,470 $202,075 $ -- $1,887,545 $ -- $1,887,545
Cost and expenses:
Cost of products sold....... 1,278,519 125,834 -- 1,404,353 (11,500)(e) 1,392,853
Amortization of acquired
goodwill.................. 10,739 -- 5,678(a) 16,417 -- 16,417
Selling, general and
administrative expense.... 320,132 50,626 (1,754)(b) 369,004 (36,083)(f) 332,921
---------- -------- -------- ---------- -------- ----------
1,609,390 176,460 3,924 1,789,774 (47,583) 1,742,191
---------- -------- -------- ---------- -------- ----------
Operating earnings (loss)....... 76,080 25,615 (3,924) 97,771 47,583 145,354
Interest expense................ (77,559) (11,892) (7,443)(c) (96,894) -- (96,894)
Investment income............... 8,358 50 -- 8,408 -- 8,408
---------- -------- -------- ---------- -------- ----------
Earnings (loss) from continuing
operations before provision
(benefit) for income taxes.... 6,879 13,773 (11,367) 9,285 47,583 56,868
Provision (benefit) for income
taxes......................... 4,092 5,361 (1,452)(d) 8,001 18,433(g) 26,434
---------- -------- -------- ---------- -------- ----------
Earnings (loss) from continuing
operations.................... $ 2,787 $ 8,412 $ (9,915) $ 1,284 $ 29,150 $ 30,434
========== ======== ======== ========== ======== ==========
EARNINGS PER SHARE AS ADJUSTED
FOR THE COMMON STOCK OFFERING:
Earnings from continuing
operations:
Basic....................... $ .24 $ .11 $ 2.60
Diluted..................... .23 .11 2.56
Weighted average number of
shares:
Basic....................... 11,723 11,723 11,723
Diluted..................... 11,893 11,893 11,893
</TABLE>
See Notes to the Unaudited Pro Forma and Pro Forma Adjusted (For Ply Gem and
NuTone) Condensed Consolidated Statement of Operations
<PAGE> 24
NOTES TO THE UNAUDITED PRO FORMA AND
PRO FORMA ADJUSTED (FOR PLY GEM AND NUTONE)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS TWELVE MONTHS
YEAR ENDED ENDED ENDED
DECEMBER 31, 1997 APRIL 4, 1998 APRIL 4, 1998
----------------- ------------- -------------
<S> <C> <C> <C>
(a) AMORTIZATION OF ACQUIRED GOODWILL
Amortization of goodwill over 40 years related to the
NuTone Acquisition........................................ $ 5,678 $ 1,420 $ 5,678
======== ======== ========
(b) SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
Elimination of management fees and other charges paid by
NuTone to Williams plc and related entities, net of
estimated incremental Nortek management costs............. $ (1,746) $ (482) $ (1,754)
======== ======== ========
(c) INTEREST EXPENSE
Interest expense related to the 8 7/8% Notes................ $(18,637) $ (4,659) $(18,637)
Amortization of debt issuance costs related to the
Offering.................................................. (649) (162) (649)
Amortization of debt discount related to the 8 7/8% Notes... (49) (13) (49)
Reduction of interest expense related to intercompany
borrowings not assumed in the NuTone Acquisition.......... 11,852 3,060 11,892
-------- -------- --------
$ (7,483) $ (1,774) $ (7,443)
======== ======== ========
(d) PROVISION (BENEFIT) FOR INCOME TAXES
Net provision (benefit) for income taxes related to notes
(b) and (c) above......................................... $ (1,470) $ (279) $ (1,452)
======== ======== ========
(e) COST OF PRODUCTS SOLD
Elimination of charges recorded by Ply Gem prior to the Ply
Gem Acquisition, to provide certain valuation reserves and
to conform accounting policies to Nortek's................ $(11,500) $ -- $(11,500)
======== ======== ========
(f) SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
Estimated Ply Gem Acquisition Additional Cost Savings....... $(14,061) $ -- $(10,383)
Elimination of charges recorded by Ply Gem prior to the Ply
Gem Acquisition, to provide certain valuation reserves and
to conform accounting policies to Nortek's................ (10,700) -- (10,700)
Estimated cost reductions related to the NuTone
Acquisition............................................... (15,000) (3,750) (15,000)
-------- -------- --------
$(39,761) $ (3,750) $(36,083)
======== ======== ========
(g) PROVISION FOR INCOME TAXES
Tax provisions on the Ply Gem additional cost savings and
reductions and eliminations of charges recorded by Ply Gem
referred to in notes (e) and (f) above.................... $ 13,891 $ -- $ 12,604
Tax provision related to the estimated cost reductions as
referred to in note (f) above............................. 5,829 1,500 5,829
-------- -------- --------
$ 19,720 $ 1,500 $ 18,433
======== ======== ========
</TABLE>
<PAGE> 25
UNAUDITED PRO FORMA AND PRO FORMA ADJUSTED (FOR PLY GEM)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA ADJUSTED
NORTEK PLY GEM PRO FORMA NORTEK AND ADDITIONAL NORTEK AND
HISTORICAL HISTORICAL(a) ADJUSTMENTS PLY GEM ADJUSTMENTS PLY GEM
---------- ------------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net sales................... $1,134,129 $515,923 $ -- $1,650,052 $ -- $1,650,052
Cost and expenses:
Cost of products sold... 826,453 431,196 (1,300)(b) 1,256,349 (11,500)(h) 1,244,849
Amortization of acquired
goodwill.............. 5,319 976 4,795(c) 11,090 -- 11,090
Selling, general and
administrative
expense............... 219,376 99,912 (7,746)(d) 311,542 (24,761)(i) 286,781
---------- -------- -------- ---------- -------- ----------
1,051,148 532,084 (4,251) 1,578,981 (36,261) 1,542,720
---------- -------- -------- ---------- -------- ----------
Operating earnings (loss)... 82,981 (16,161) 4,251 71,071 36,261 107,332
Interest expense............ (50,210) (5,696) (21,887)(e) (77,793) -- (77,793)
Investment income........... 9,929 302 (2,742)(f) 7,489 -- 7,489
---------- -------- -------- ---------- -------- ----------
Earnings (loss) from
continuing operations
before provision (benefit)
for income taxes.......... 42,700 (21,555) (20,378) 767 36,261 37,028
Provision (benefit) for
income taxes.............. 16,300 (8,484) (5,545)(g) 2,271 13,891(j) 16,162
---------- -------- -------- ---------- -------- ----------
Earnings (loss) from
continuing operations..... $ 26,400 $(13,071) $(14,833) $ (1,504) $ 22,370 $ 20,866
========== ======== ======== ========== ======== ==========
EARNINGS (LOSS) PER SHARE AS
ADJUSTED FOR THE COMMON
STOCK OFFERING:
Earnings (loss) from
continuing operations:
Basic................... $ 2.24 $ (.13) $ 1.77
Diluted................. 2.19 (.13) 1.73
Weighted average number of
shares:
Basic................... 11,788 11,788 11,788
Diluted................. 12,038 12,038 12,038
</TABLE>
See Notes to the Unaudited Pro Forma and Pro Forma Adjusted (For Ply Gem)
Condensed Consolidated Statement of Operations
<PAGE> 26
UNAUDITED PRO FORMA AND PRO FORMA ADJUSTED (FOR PLY GEM)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED APRIL 4, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA ADJUSTED
NORTEK PLY GEM PRO FORMA NORTEK AND ADDITIONAL NORTEK AND
HISTORICAL HISTORICAL(a) ADJUSTMENTS PLY GEM ADJUSTMENTS PLY GEM
---------- ------------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net sales................... $1,332,359 $353,111 $ -- $1,685,470 $ -- $1,685,470
Cost and expenses:
Cost of products sold... 984,121 295,198 (800)(b) 1,278,519 (11,500)(h) 1,267,019
Amortization of acquired
goodwill.............. 7,167 610 2,962(c) 10,739 -- 10,739
Selling, general and
administrative
expense............... 251,859 73,065 (4,792)(d) 320,132 (21,083)(i) 299,049
---------- -------- -------- ---------- -------- ----------
1,243,147 368,873 (2,630) 1,609,390 (32,583) 1,576,807
---------- -------- -------- ---------- -------- ----------
Operating earnings (loss)... 89,212 (15,762) 2,630 76,080 32,583 108,663
Interest expense............ (62,345) (4,028) (11,186)(e) (77,559) -- (77,559)
Investment income........... 10,733 148 (2,523)(f) 8,358 -- 8,358
---------- -------- -------- ---------- -------- ----------
Earnings (loss) from
continuing operations
before provision (benefit)
for income taxes.......... 37,600 (19,642) (11,079) 6,879 32,583 39,462
Provision (benefit) for
income taxes.............. 14,600 (7,623) (2,885)(g) 4,092 12,604(j) 16,696
---------- -------- -------- ---------- -------- ----------
Earnings (loss) from
continuing operations..... $ 23,000 $(12,019) $ (8,194) $ 2,787 $ 19,979 $ 22,766
========== ======== ======== ========== ======== ==========
EARNINGS PER SHARE AS
ADJUSTED FOR THE COMMON
STOCK OFFERING:
Earnings from continuing
operations:
Basic................... $ 1.96 $ .24 $ 1.94
Diluted................. 1.93 .23 1.91
Weighted average number of
shares:
Basic................... 11,723 11,723 11,723
Diluted................. 11,893 11,893 11,893
</TABLE>
See Notes to the Unaudited Pro Forma and Pro Forma Adjusted (For Ply Gem)
Condensed Consolidated Statement of Operations
<PAGE> 27
NOTES TO THE UNAUDITED PRO FORMA AND
PRO FORMA ADJUSTED (FOR PLY GEM)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED TWELVE MONTHS
DECEMBER 31, ENDED
1997 APRIL 4, 1998
------------ -------------
<S> <C> <C>
(a) PLY GEM HISTORICAL
Amounts for the year ended December 31, 1997 include the
unaudited results of Ply Gem for the period from January
1, 1997 to August 25, 1997. Amounts for the twelve months
ended April 4, 1998 include the unaudited results of Ply
Gem for the period from April 1, 1997 to August 25, 1997.
(b) COST OF PRODUCTS SOLD
Change in estimated lives of property, plant and equipment
offset by increased depreciation over 10 years due to
increase in Property, Plant and Equipment to estimated
fair value................................................ $ (1,300) $ (800)
======== ========
(c) AMORTIZATION OF ACQUIRED GOODWILL
Increase amortization of goodwill over 40 years due to the
Ply Gem Acquisition....................................... $ 4,795 $ 2,962
======== ========
(d) SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
Estimated Ply Gem Acquisition Related Cost Savings.......... $ (3,983) $ (2,316)
Reduction of goodwill and intangible amortization included
in Ply Gem's selling, general and administrative
expense................................................... (1,733) (1,055)
Decrease due to termination and repurchase of amounts
outstanding under Ply Gem's accounts receivable
securitization program.................................... (2,030) (1,421)
-------- --------
$ (7,746) $ (4,792)
======== ========
(e) INTEREST EXPENSE
Interest expense related to the 9 1/4% Notes................ $ (3,438) $ --
Amortization of related debt issuance costs of the 9 1/4%
Notes..................................................... (106) --
Reduction of interest expense related to debt refinanced
with a portion of the proceeds from the 9 1/4% Notes...... 1,143 341
Interest expense related to the 9 1/8% Notes................ (18,495) (11,423)
Amortization of related debt discount and issuance costs of
the 9 1/8% Notes.......................................... (771) (476)
Interest expense at an assumed average rate of 6.85% on
indebtedness outstanding under the Ply Gem Credit
Facility.................................................. (4,971) (3,070)
Reduction in interest expense related to the refinancing of
Ply Gem indebtedness at the date of the Ply Gem
Acquisition............................................... 4,751 3,442
-------- --------
$(21,887) $(11,186)
======== ========
(f) INVESTMENT INCOME
Reduction in interest income on marketable securities sold
to fund the Ply Gem Acquisition and related
transactions.............................................. $ (2,742) $ (2,523)
======== ========
(g) PROVISION (BENEFIT) FOR INCOME TAXES
Net benefit for income taxes related to notes (b), (d), (e)
and (f) above............................................. $ (5,545) $ (2,885)
======== ========
(h) COST OF PRODUCTS SOLD
Elimination of charges recorded by Ply Gem prior to the Ply
Gem Acquisition, to provide certain valuation reserves and
to conform accounting policies to Nortek's................ $(11,500) $(11,500)
======== ========
</TABLE>
<PAGE> 28
<TABLE>
<CAPTION>
YEAR ENDED TWELVE MONTHS
DECEMBER 31, ENDED
1997 APRIL 4, 1998
------------ -------------
<S> <C> <C>
(i) SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
Estimated Ply Gem Acquisition Additional Cost Savings....... $(14,061) $(10,383)
Elimination of charges recorded by Ply Gem prior to the Ply
Gem Acquisition, to provide certain valuation reserves and
to conform accounting policies to Nortek's................ (10,700) (10,700)
-------- --------
$(24,761) $(21,083)
======== ========
(j) PROVISION FOR INCOME TAXES
Net provision for income taxes related to notes (h) and (i)
above..................................................... $ 13,891 $ 12,604
======== ========
</TABLE>
<PAGE> 29
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report be signed on its behalf of the
undersigned hereunto duly authorized.
NORTEK, INC.
Date: August 12, 1998 By: /s/ Almon C. Hall
---------------------------
Almon C. Hall
Vice President - Controller
<PAGE> 1
Exhibit 2.2
AMENDMENT NO. 1 TO
STOCK PURCHASE AND SALE AGREEMENT
This Amendment No. 1 (the "Amendment") to the Stock Purchase and Sale
Agreement (the "Agreement") dated as of March 9, 1998 by and between Williams
Y&N Holdings, Inc., a Delaware corporation (the "Seller"), and NTK Sub, Inc., a
Delaware corporation (the "Buyer"), is entered into as of the 11th day of May,
1998. Capitalized terms used herein and not otherwise defined shall have the
same meaning as in the Agreement.
WHEREAS, the Parties desire to amend certain provisions of the Agreement
as set forth below.
NOW THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the Parties agree as follows:
1. Section 7.1(e) of the Agreement is hereby amended by replacing the
two references therein to "June 19, 1998" with "July 3, 1998".
2. Clause (ii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "May 15, 1998" with "May 29, 1998".
3. Clause (iii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "May 29, 1998" with "June 12, 1998".
4. Section 7.1(c) of the Agreement is hereby amended by replacing the
reference therein to "July 17, 1998" with "July 31, 1998".
5. Section 7.1(d) of the Agreement is hereby amended by replacing the
reference therein to "July 17, 1998" with "July 31, 1998".
6. Section 7.1(f) of the Agreement is hereby amended by replacing the
reference therein to "July 10, 1998" with "July 24, 1998".
7. Clause (iii) of Section 7.2(c) of the Agreement is hereby amended by
replacing the reference therein to "July 10, 1998" with "July 24, 1998".
8. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument. This Amendment may be executed by facsimile
signature.
9. Except as amended hereby, the Agreement shall remain in full force
and effect in accordance with its terms.
<PAGE> 2
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of
the date first above written.
WILLIAMS Y&N HOLDINGS, INC.
By: /s/ Tim Allen
---------------------------------
Name: TIM ALLEN
---------------------------------
Title: Head Group Manager
---------------------------------
WILLIAMS PLC
By: /s/ Tim Allen
---------------------------------
Name: TIM ALLEN
---------------------------------
Title: Head Group Manager
---------------------------------
NTK SUB, INC.
By: /s/ Kevin W. Donnelly
---------------------------------
Name: KEVIN W. DONNELLY
---------------------------------
Title: VICE PRESIDENT
---------------------------------
NORTEK, INC.
By: /s/ Kevin W. Donnelly
---------------------------------
Name: KEVIN W. DONNELLY
---------------------------------
Title: VICE PRESIDENT, GENERAL COUNSEL
---------------------------------
-2-
<PAGE> 3
AMENDMENT NO. 2 TO
STOCK PURCHASE AND SALE AGREEMENT
This Amendment No. 2 (the "Amendment") to the Stock Purchase and Sale
Agreement dated as of March 9, 1998 (as amended by Amendment No. 1 thereto
dated May 11, 1998, the "Agreement") by and between Williams Y&N Holdings, Inc.,
a Delaware corporation (the "Seller"), and NTK Sub, Inc., a Delaware
corporation (the "Buyer"), is entered into as of the 28th day of May, 1998.
Capitalized terms used herein and not otherwise defined shall have the same
meaning as in the Agreement.
WHEREAS, the Parties desire to amend certain provisions of the Agreement
as set forth below,
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the Parties agree as follows:
1. Section 7.1(e) of the Agreement is hereby amended by replacing the
two references therein to "July 3, 1998" with "July 13, 1998".
2. Clause (ii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "May 29, 1998" with "June 8, 1998".
3. Clause (iii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "June 12, 1998" with "June 22, 1998".
4. Section 7.1(c) of the Agreement is hereby amended by replacing the
reference therein to "July 31, 1998" with "August 10, 1998".
5. Section 7.1(d) of the Agreement is hereby amended by replacing the
reference therein to "July 31, 1998" with "August 10, 1998".
6. Section 7.1(f) of the Agreement is hereby amended by replacing the
reference therein to "July 24, 1998" with "August 3, 1998".
7. Clause (iii) of Section 7.2(c) of the Agreement is hereby amended by
replacing the reference therein to "July 24, 1998" with "August 3, 1998".
8. If requested by the Seller, the Buyer shall cause Standby Letter of
Credit No. RS1093819 (Date of Issue: March 9, 1998), which was previously
issued by Fleet National Bank pursuant to Section 7.2(d) of the Agreement, to
be amended prior to July 31, 1998 to extend the "Expiration Date" (as defined
therein) to a date that is on or after August 10, 1998.
<PAGE> 4
9. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument. This Amendment may be executed by facsimile
signature.
10. Except as amended hereby, the Agreement shall remain in full force
and effect in accordance with its terms.
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of
the date first above written.
WILLIAMS Y&N HOLDINGS, INC.
By: /s/ Tim Allen
-------------------------------------
Name: Tim Allen
-----------------------------------
Title: HEAD GROUP MANAGER
----------------------------------
WILLIAMS PLC
By: /s/ Tim Allen
-------------------------------------
Name: Tim Allen
-----------------------------------
Title: HEAD GROUP MANAGER
----------------------------------
NTK SUB, INC.
By: /s/ Kevin W. Donnelly
-------------------------------------
Name: Kevin W. Donnelly
-----------------------------------
Title: Vice President
----------------------------------
NORTEK, INC.
By: /s/ Kevin W. Donnelly
-------------------------------------
Name: Kevin W. Donnelly
-----------------------------------
Title: Vice President, General Counsel
----------------------------------
-2-
<PAGE> 5
AMENDMENT NO. 3 TO
STOCK PURCHASE AND SALE AGREEMENT
This Amendment No. 3 (the "Amendment") to the Stock Purchase and Sale
Agreement dated as of March 9, 1998 (as amended by Amendment No. 1 thereto
dated May 11, 1998 and Amendment No. 2 thereto dated May 28, 1998, the
"Agreement") by and between Williams Y&N Holdings, Inc., a Delaware corporation
(the "Seller"), and NTK Sub, Inc., a Delaware corporation (the "Buyer"), is
entered into as of the 3rd day of June, 1998. Capitalized terms used herein and
not otherwise defined shall have the same meaning as in the Agreement.
WHEREAS, the Parties desire to amend certain provisions of the Agreement
as set forth below,
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the Parties agree as follows:
1. Section 7.1(e) of the Agreement is hereby amended by replacing the
two references therein to "July 13, 1998" with "July 20, 1998".
2. Clause (ii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "June 8, 1998" with "June 15, 1998".
3. Clause (iii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "June 22, 1998" with "June 29, 1998".
4. Section 7.1(c) of the Agreement is hereby amended by replacing the
reference therein to "August 10, 1998" with "August 17, 1998".
5. Section 7.1(d) of the Agreement is hereby amended by replacing the
reference therein to "August 10, 1998" with "August 17, 1998".
6. Section 7.1(f) of the Agreement is hereby amended by replacing the
reference therein to "August 3, 1998" with "August 10, 1998".
7. Clause (iii) of Section 7.2(c) of the Agreement is hereby amended by
replacing the reference therein to "August 3, 1998" with "August 10, 1998".
8. If requested by the Seller, the Buyer shall cause Standby Letter of
Credit No. RS1093819 (Date of Issue: March 9, 1998), which was previously
issued by Fleet National Bank pursuant to Section 7.2(d) of the Agreement, to
be amended prior to July 31, 1998 to extend the "Expiration Date" (as defined
therein) to a date that is on or after August 17, 1998.
<PAGE> 6
9. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument. This Amendment may be executed by facsimile
signature.
10. Except as amended hereby, the Agreement shall remain in full force
and effect in accordance with its terms.
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of
the date first above written.
WILLIAMS Y&N HOLDINGS, INC.
By: /s/ Tim Allen
-------------------------------------
Name: Tim Allen
-----------------------------------
Title: Head Group Manager
----------------------------------
WILLIAMS PLC
By: /s/ Tim Allen
-------------------------------------
Name: Tim Allen
-----------------------------------
Title: Head Group Manager
-----------------------------------
NTK SUB, INC.
By: /s/ Kevin W. Donnelly
--------------------------------
Name: Kevin W. Donnelly
------------------------------
Title: Vice President
-----------------------------
NORTEK, INC.
By: /s/ Kevin W. Donnelly
--------------------------------
Name: Kevin W. Donnelly
------------------------------
Title: Vice President,
General Counsel
------------------------------
-2-
<PAGE> 7
AMENDMENT NO. 4 TO
STOCK PURCHASE AND SALE AGREEMENT
This Amendment No. 4 (the "Amendment") to the Stock Purchase and Sale
Agreement dated as of March 9, 1998 (as amended by Amendment No. 1 thereto dated
May 11, 1998, Amendment No. 2 thereto dated May 28, 1998, and Amendment No. 3
thereto dated June 3, 1998, the "Agreement") by and between Williams Y&N
Holdings, Inc., a Delaware corporation (the "Seller"), and NTK Sub, Inc., a
Delaware corporation (the "Buyer"), is entered into as of the 11th day of June,
1998. Capitalized terms used herein and not otherwise defined shall have the
same meaning as in the Agreement.
WHEREAS, the Parties desire to amend certain provisions of the Agreement as
set forth below,
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the Parties agree as follows:
1. Section 7.1(e) of the Agreement is hereby amended by replacing the two
references therein to "July 20, 1998" with "July 27, 1998".
2. Clause (ii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "June 15, 1998" with "June 22, 1998".
3. Clause (iii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "June 29, 1998" with "July 6, 1998".
4. Section 7.1(c) of the Agreement is hereby amended by replacing the
reference therein to "August 17, 1998" with "August 24, 1998".
5. Section 7.1(d) of the Agreement is hereby amended by replacing the
reference therein to "August 17, 1998" with "August 24, 1998".
6. Section 7.1(f) of the Agreement is hereby amended by replacing the
reference therein to "August 10, 1998" with "August 17, 1998".
7. Clause (iii) of Section 7.2(c) of the Agreement is hereby amended by
replacing the reference therein to "August 10, 1998" with "August 17, 1998".
8. If requested by the Seller, the Buyer shall cause Standby Letter of
Credit No. RS1093819 (Date of Issue: March 9, 1998), which was previously issued
by Fleet National Bank pursuant to Section 7.2(d) of the Agreement, to be
amended prior to July 31, 1998 to extend the "Expiration Date" (as defined
therein) to a date that is on or after August 24, 1998.
<PAGE> 8
9. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument. This Amendment may be executed by facsimile
signature.
10. Except as amended hereby, the Agreement shall remain in full force
and effect in accordance with its terms.
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of
the date first above written.
WILLIAMS Y&N HOLDINGS, INC.
By: /s/ Tim Allen
-------------------------------------
Name: TIM ALLEN
-----------------------------------
Title: Head Group Manager
----------------------------------
WILLIAMS PLC
By: /s/ Tim Allen
-------------------------------------
Name: TIM ALLEN
-----------------------------------
Title: Head Group Manager
----------------------------------
NTK SUB, INC.
By: /s/ Kevin W. Donnelly
-------------------------------------
Name: KEVIN W. DONNELLY
-----------------------------------
Title: VICE PRESIDENT
----------------------------------
NORTEK, INC.
By: /s/ Kevin W. Donnelly
-------------------------------------
Name: KEVIN W. DONNELLY
-----------------------------------
Title: VICE PRESIDENT, GENERAL COUNSEL
----------------------------------
-2-
<PAGE> 9
AMENDMENT NO. 5 TO
STOCK PURCHASE AND SALE AGREEMENT
This Amendment No. 5 (the "Amendment") to the Stock Purchase and Sale
Agreement dated as of March 9, 1998 (as amended by Amendment No. 1 thereto dated
May 11, 1998, Amendment No. 2 thereto dated May 28, 1998, Amendment No. 3
thereto dated June 3, 1998, and Amendment No. 4 thereto dated June 11, 1998, the
"Agreement") by and between Williams Y&N Holdings, Inc., a Delaware corporation
(the "Seller"), and NTK Sub,Inc., a Delaware corporation (the "Buyer"), is
entered into as of the 18th day of June, 1998. Capitalized terms used herein and
not otherwise defined shall have the same meaning as in the Agreement.
WHEREAS, the Parties desire to amend certain provisions of the Agreement
as set forth below,
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the Parties agree as follows:
1. Section 7.1(e) of the Agreement is hereby amended by replacing the
two references therein to "July 27, 1998" with "August 3, 1998".
2. Clause (ii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "June 22, 1998" with "June 29, 1998".
3. Clause (iii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "July 6, 1998" with "July 13, 1998".
4. Section 7.1(c) of the Agreement is hereby amended by replacing the
reference therein to "August 24, 1998" with "August 31, 1998".
5. Section 7.1(d) of the Agreement is hereby amended by replacing the
reference therein to "August 24, 1998" with "August 31, 1998".
6. Section 7.1(f) of the Agreement is hereby amended by replacing the
reference therein to "August 17, 1998" with "August 24, 1998".
7. Clause (iii) of Section 7.2(c) of the Agreement is hereby amended by
replacing the reference therein to "August 17, 1998" with "August 24, 1998".
8. If requested by the Seller, the Buyer shall cause Standby Letter of
Credit No. RS1093S19 (Date of Issue: March 9, 1998), which was previously
issued by Fleet National Bank pursuant to Section 7.2(d) of the Agreement, to
be amended prior to July 31, 1998 to extend the "Expiration Date" (as defined
therein) to a date that is on or after August 31, 1998.
<PAGE> 10
9. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument. This Amendment may be executed by facsimile
signature.
10. Except as amended hereby, the Agreement shall remain in full force
and effect in accordance with its terms.
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of
the date first above written.
WILLIAMS Y&N HOLDINGS, INC.
By: /s/ Tim Allen
----------------------
Name: Tim Allen
----------------------
Title: Head Group Manager
----------------------
WILLIAMS PLC
By: /s/ Tim Allen
----------------------
Name: Tim Allen
----------------------
Title: Head Group Manager
----------------------
NTK SUB, INC.
By: /s/ Kevin W. Donnelly
----------------------
Name: Kevin W. Donnelly
----------------------
Title: Vice President
----------------------
NORTEK, INC.
By: /s/ Kevin W. Donnelly
----------------------
Name: Kevin W. Donnelly
----------------------
Title: Vice President,
General Counsel
----------------------
-2-
<PAGE> 11
AMENDMENT NO. 6 TO
STOCK PURCHASE AND SALE AGREEMENT
This Amendment No. 6 (the "Amendment") to the Stock Purchase and Sale
Agreement dated as of March 9, 1998 (as amended by Amendment No. 1 thereto
dated May 11, 1998, Amendment No. 2 thereto dated May 28, 1998, Amendment No. 3
thereto dated June 3, 1998, Amendment No. 4 thereto dated June 11, 1998, and
Amendment No. 5 thereto dated June 18, 1998, the "Agreement) by and between
Williams Y&N Holdings, Inc., a Delaware corporation (the "Seller"), and NTK
Sub, Inc., a Delaware corporation (the "Buyer"), is entered into as of the 26th
day of June, 1998. Capitalized terms used herein and not otherwise defined
shall have the same meaning as in the Agreement.
WHEREAS, the Parties desire to amend certain provisions of the Agreement
as set forth below,
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the Parties agree as follows:
1. Section 7.1(e) of the Agreement is hereby amended by replacing the
two references therein to "August 3, 1998" with "August 17, 1998".
2. Clause (ii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "June 29, 1998" with "July 13, 1998".
3. Clause (iii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "July 13, 1998" with "July 27, 1998".
4. Section 7.1(c) of the Agreement is hereby amended by replacing the
reference therein to "August 31, 1998" with "September 14, 1998".
5. Section 7.1(d) of the Agreement is hereby amended by replacing the
reference therein to "August 31, 1998" with "September 14, 1998".
6. Section 7.1(f) of the Agreement is hereby amended by (i) replacing
the reference therein to "August 24, 1998" with "September 8, 1998" and (ii)
replacing the reference therein to "45 days" with "30 days".
7. Clause (iii) of Section 7.2(c) of the Agreement is hereby amended by
(i) replacing the reference therein to "August 24, 1998" with "September 8,
1998" and (ii) replacing the reference therein to "45 days" with "30 days".
8. Section 1.3 of the Agreement is hereby amended by replacing the
reference therein to "45 days" with "30 days".
<PAGE> 12
9. If requested by the Seller, the Buyer shall cause Standby Letter of
Credit No. RS1093819 (Date of Issue: March 9, 1998), which was previously
issued by Fleet National Bank pursuant to Section 7.2(d) of the Agreement, to
be amended prior to July 31, 1998 to extend the "Expiration Date" (as defined
therein) to a date that is on or after September 14, 1998.
10. Section 4.2 of the Agreement is hereby amended by deleting the final
sentence thereof and replacing it with the following:
"For purposes of this Agreement, the term "FTC Clearance Date" shall
mean the first of the following dates to occur: (i) the date that the
post-Second-Request compliance waiting period applicable to the
consummation of the transactions contemplated by this Agreement under
the Hart-Scott-Rodino Act has expired without the FTC seeking to
restrain or enjoin consummation of the transactions contemplated by
this Agreement; (ii) the date that the post-Second-Request compliance
waiting period applicable to the consummation of the transactions
contemplated by this Agreement under the Hart-Scott-Rodino Act has
been terminated by the FTC with the indication that the FTC will not
seek to restrain or enjoin consummation of the transactions
contemplated by this Agreement; and (iii) the date that the
post-Second-Request compliance waiting period applicable to the
consummation of the transactions contemplated by this Agreement under
the Hart-Scott-Rodino Act has been terminated by the FTC concurrently
with or following the FTC's provisional acceptance of a consent decree
executed by or on behalf of the Buyer or an Affiliate of the Buyer."
11. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument. This Amendment may be executed by facsimile
signature.
12. Except as amended hereby, the Amendment shall remain in full force
and effect in accordance with its terms.
-2-
<PAGE> 13
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment No. 6
as of the date first above written.
WILLIAMS Y&N HOLDINGS, INC.
BY: /s/ Tim Allen
---------------------------
Name: Tim Allen
---------------------------
Title: Head Group Manager
---------------------------
WILLIAMS PLC
By: /s/ Tim Allen
---------------------------
Name: Tim Allen
---------------------------
Title: Head Group Manager
---------------------------
NTK SUB, INC.
By: /s/ KEVIN W. DONNELLY
---------------------------
Name: Kevin W. Donnelly
-------------------------
Title: Vice President
------------------------
NORTEK, INC.
By: /s/ KEVIN W. DONNELLY
---------------------------
Name: Kevin W. Donnelly
-------------------------
Title: Vice President,
General Manger
------------------------
-3-
<PAGE> 14
AMENDMENT NO. 7 TO
STOCK PURCHASE AND SALE AGREEMENT
This Amendment No. 7 (the "Amendment") to the Stock Purchase and Sale
Agreement dated as of March 9, 1998 (as amended by Amendment No. 1 thereto dated
May 11, 1998, Amendment No. 2 thereto dated May 28, 1998, Amendment No. 3
thereto dated June 3, 1998, Amendment No. 4 thereto dated June 11, 1998,
Amendment No. 5 thereto dated June 18, 1998 and Amendment No. 6 thereto dated
June 26, 1998, the "Agreement") by and between Williams Y&N Holdings, Inc., a
Delaware corporation (the "Seller"), and NTK Sub, Inc., a Delaware corporation
(the "Buyer"), is entered into as of the 8th day of July, 1998. Capitalized
terms used herein and not otherwise defined shall have the same meaning as in
the Agreement.
WHEREAS, the Parties desire to amend certain provisions of the Agreement as
set forth below,
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the Parties agree as follows:
1. Section 7.1(e) of the Agreement is hereby amended by replacing the two
references therein to "August 17, 1998" with "August 31, 1998".
2. Clause (ii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "July 13, 1998" with "July 27, 1998".
3. Clause (iii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "July 27, 1998" with "August 10, 1998".
4. Section 7.1(c) of the Agreement is hereby amended by replacing the
reference therein to "September 14, 1998" with "September 28, 1998".
5. Section 7.1(d) of the Agreement is hereby amended by replacing the
reference therein to "September 14, 1998" with "September 28, 1998".
6. Section 7.1(f) of the Agreement is hereby amended by replacing the
reference therein to "September 8, 1998" with "September 21, 1998".
7. Clause (iii) of Section 7.2(c) of the Agreement is hereby amended by (i)
replacing the reference therein to "September 8, 1998" with "September 21,
1998".
8. If requested by the Seller, the Buyer shall cause Standby Letter of
Credit No. RS1093819 (Date of Issue: March 9, 1998), which was previously issued
by Fleet National Bank pursuant to Section 7.2(d) of the Agreement, to be
amended prior to July 31, 1998 to extend the "Expiration Date" (as defined
therein) to a date that is on or after September 28, 1998.
9. Section 4.2 of the Agreement is hereby amended by deleting the final
sentence thereof and replacing it with the following:
"For purposes of this Agreement, the term "FTC Clearance Date" shall
mean the first of the following dates to occur: (i) the date that the
post-Second-Request compliance waiting period applicable to the
consummation of the
<PAGE> 15
transactions contemplated by this Agreement under the
Hart-Scott-Rodino Act has expired without the FTC seeking to restrain
or enjoin consummation of the transactions contemplated by this
Agreement: (ii) the date that the post-Second-Request compliance
waiting period applicable to the consummation of the transactions
contemplated by this Agreement under the Hart-Scott-Rodino Act has
been terminated by the FTC with the indication that the FTC will not
seek to restrain or enjoin consummation of the transactions
contemplated by this Agreement; and (iii) the date that the
post-Second-Request compliance waiting period applicable to the
consummation of the transactions contemplated by this Agreement under
the Hart-Scott-Rodino Act has been terminated by the FTC concurrently
with or following the FTC's provisional acceptance of a consent decree
executed by or on behalf of the Buyer or an Affiliate of the Buyer
pursuant to the Agreement to Hold Separate and the Consent Order
entered into between the Buyer and the FTC (File No. 981-0111)."
10. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument. This Amendment may be executed by facsimile signature.
11. Except as amended hereby, the Agreement shall remain in full force and
effect in accordance with its terms.
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment No. 7
as of the date first above written.
WILLIAMS Y&N HOLDINGS, INC.
By: /s/ Tim Allen
----------------------------------------
Name: Tim Allen
--------------------------------------
Title: Head Group Mgr and Corporate Affairs
-------------------------------------
WILLIAMS PLC
By: /s/ Tim Allen
----------------------------------------
Name: Tim Allen
--------------------------------------
Title: Head Group Mgr and Corporate Affairs
-------------------------------------
NTK SUB, INC.
By: /s/ Kevin W. Donnelly
----------------------------------------
Name: Kevin W. Donnelly
--------------------------------------
Title: Vice President
-------------------------------------
NORTEK, INC.
By: /s/ Kevin W. Donnelly
----------------------------------------
Name: Kevin W. Donnelly
--------------------------------------
Title: Vice President, General Counsel
-------------------------------------
-2-
<PAGE> 16
AMENDMENT NO. 8 TO
STOCK PURCHASE AND SALE AGREEMENT
This Amendment No. 8 (the "Amendment") to the Stock Purchase and Sale
Agreement dated as of March 9, 1998 (as amended by Amendment No.1 thereto dated
May 11, 1998, Amendment No. 2 thereto dated May 28, 1998, Amendment No. 3
thereto dated June 3, 1998, Amendment No. 4 thereto dated June 11, 1998,
Amendment No. 5 thereto dated June 18, 1998, Amendment No. 6 thereto dated June
26, 1998 and Amendment No. 7 thereto dated July 8, 1998, the "Agreement") by and
between Williams Y&N Holdings, Inc., a Delaware corporation (the "Seller"), and
NTK Sub, Inc., a Delaware corporation (the "Buyer"), is entered into as of the
23rd day of July, 1998. Capitalized terms used herein and not otherwise defined
shall have the same meaning as in the Agreement.
WHEREAS, the Parties desire to amend the provision of the Agreement as set
forth below,
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the Parties agree as follows:
1. Section 7.1(e) of the Agreement is hereby amended by replacing the two
references therein to "August 31, 1998" with "September 8, 1998."
2. Clause (ii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "July 27, 1998" with "August 3, 1998."
3. Clause (iii) of Section 7.2(b) of the Agreement is hereby amended by
replacing the reference therein to "August 10, 1998" with "August 17, 1998."
4. Section 7.1(c) of the Agreement is hereby amended by replacing the
reference therein to "September 28, 1998" with "October 5, 1998."
5. Section 7.1(d) of the Agreement is hereby amended by replacing the
reference therein to "September 28, 1998" with "October 5, 1998."
6. Section 7.1(f) of the Agreement is hereby amended by replacing the
reference therein to "September 21, 1998" with "September 28,1998."
7. Clause (iii) of Section 7.2(c) of the Agreement is hereby amended by
replacing the reference therein to "September 21, 1998" with "September 28,
1998."
8. If requested by the Seller, the Buyer shall cause Standby Letter of
Credit No. RS1093819 (Date of Issue: March 9, 1998), which was previously issued
by Fleet National Bank pursuant to Section 7.2(d) of the Agreement, to be
amended on or prior to July 31, 1998 to extend the "Expiration Date" (as defined
therein) to a date that is on or after October 5, 1998.
<PAGE> 17
9. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument. This Amendment may be executed by facsimile
signature.
10. Except as amended hereby, the Agreement shall remain in full force
and effect in accordance with its terms.
11. IN WITNESS WHEREOF, the Parties hereto have executed this Amendment
No. 8 as of the date first above written.
WILLIAMS Y&N HOLDINGS, INC.
By: /s/ Tim Allen
------------------------------------
Name: Tim Allen
Title:
WILLIAMS PLC
By: /s/ Tim Allen
------------------------------------
Name: Tim Allen
Title:
NTK SUB, INC.
By: /s/ Kevin W. Donnelly
------------------------------------
Name: Kevin W. Donnelly
Title: Vice President
NORTEK, INC.
By: /s/ Kevin W. Donnelly
------------------------------------
Name: Kevin W. Donnelly
Title: Vice President, General Manager
-2-
<PAGE> 18
AMENDMENT NO. 9 TO
STOCK PURCHASE AND SALE AGREEMENT
This Amendment No. 9 (the "Amendment") to the Stock Purchase and Sale
Agreement dated as of March 9, 1998, (as amended by Amendment No. 1 thereto
dated May 11, 1998, Amendment No. 2 thereto dated May 28, 1998, Amendment No. 3
thereto dated June 3, 1998, Amendment No. 4 thereto dated June 11, 1998,
Amendment No. 5 thereto dated June 18, 1998, Amendment No. 6 thereto dated June
26, 1998, Amendment No. 7 thereto dated July 8, 1998 and Amendment No. 8
thereto dated July 23, 1998 (the "Agreement") by and between Williams Y&N
Holdings, Inc., a Delaware corporation (the "Seller"), and NTK Sub, Inc., a
Delaware corporation (the "Buyer"), is entered into as of the 28th day of July,
1998. Capitalized terms used herein and not otherwise defined shall have the
same meaning as in the Agreement.
WHEREAS, the Parties desire to amend the provision of the Agreement as set
forth below,
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the Parties agree as follows:
1. Section 1.4(a)(I) of the Agreement is hereby amended by adding the
following proviso at the end of the first sentence:
"provided however, that if the Closing occurs on or before July 31st, then
the Closing Balance Sheet Date shall be August 1, 1998."
2. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument. This Amendment may be executed by facsimile
signature.
3. Except as amended hereby, the Agreement shall remain in full force
and effect in accordance with its terms.
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment No. 9
as of the date first above written.
WILLIAMS Y&N HOLDINGS, INC.
By: /s/ Robin Brown
--------------------------
Name: Robin Brown
--------------------------
Title: Associate Director of
Corporate Finance
-----------------------
<PAGE> 19
WILLIAMS PLC
By: /s/ Robin Brown
------------------------------------
Name: Robin Brown
Title: Associate Director of Corporate
Finance
NTK SUB, INC.
By: /s/ Kevin W. Donnelly
------------------------------------
Name: Kevin W. Donnelly
Title: Vice President
NORTEK, INC.
By: /s/ Kevin W. Donnelly
------------------------------------
Name: Kevin W. Donnelly
Title: Vice President, General Manager &
Secretary
-2-
<PAGE> 1
EXHIBIT 23.1
[PRICEWATERHOUSECOOPERS LLP LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Form 8-K, and to the incorporation by
reference in the registration statements of Nortek, Inc. on Form S-8 (File
No.'s 33-22527, 33-47897 and 333-39293), of our report dated February 20, 1998,
on our audit of the consolidated financial statements of NuTone Inc. and
Subsidiary as of December 31, 1997, and for the year then ended.
/s/ PricewaterhouseCoopers LLP
Cincinnati, Ohio
August 12, 1998
