SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): May 6, 1998
___________
NORTEK, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 1-6112 05-0314991
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of I.D. Number)
Incorporation)
___________
50 Kennedy Plaza, Providence. Rhode Island 02903-2360
(Address of Principal Executive Offices) (Zip Code)
(401) 751-1600
Registrant's Telephone Number including area code
Item 5. Other Events
Nortek, Inc. is filing herewith a press release
issued May 6, 1998 by the Company as Exhibit 99 which is
incorporated herein by reference. This press release was
issued to report first quarter 1998 earnings.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 99 Press release issued by Nortek,
Inc. on May 6, 1998.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the registrant has duly
caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
NORTEK, INC.
May 7, 1998 By: /s/ Richard J. Harris
- ------------- ----------------------
Date Name: Richard J. Harris
Title: Vice President and Treasurer
Exhibit 99
CONTACT: Richard L. Bready, Chairman
Richard J. Harris, Vice President and Treasurer
(401) 751-1600
RELEASE: IMMEDIATE
NORTEK REPORTS STRONG 1ST QUARTER
BEATING ANALYSTS' ESTIMATES
PROVIDENCE, RI, May 6, 1998--Nortek, Inc. (NYSE:NTK) today
reported strong net sales, EBITDA and earnings from continuing
operations for the first quarter ended April 4, 1998.
For the 1998 first quarter, the Company's net sales were $392.5
million versus $194.2 million a year earlier. First-quarter 1998
net sales included $172.6 million from the acquisition of Ply Gem
Industries, Inc. in August, 1997. EBITDA for the quarter was
$29.7 million and pre-tax earnings from continuing operations
were $2.5 million. Earnings from continuing operations per
diluted share were $.13 versus a pro forma, as adjusted, loss of
$.06 for 1997 and analysts' estimates of a $.04 loss for 1998.
First-quarter revenues reflect an approximate 13-percent increase
from Nortek's 1997 level for existing businesses plus the revenue
contribution from the Ply Gem acquisition. Operating results,
due to the seasonal nature of the Ply Gem Windows, Doors and Siding
Group with their heavy concentration in the upper mid-west and
northeast regions of the country are proportionately lower than the
results expected in other quarters.
Mr. Richard L. Bready, Chairman and Chief Executive Officer, said
"we are extremely pleased with the strong operating results for
the first quarter from our core businesses, and look forward to
improving results from Ply Gem as we move into the strong second-
quarter selling period."
Nortek is a leading international manufacturer and distributor of high-
quality, competitively priced building, remodeling and indoor
environmental control products for the residential, commercial and
industrial markets. The Company offers a broad array of products for
improving the environments where people live and work. Its products
include range hoods and spot ventilation products, heating and air
conditioning systems, wood and vinyl windows and doors, vinyl siding
products, air quality systems, and specialty electronic, wood and
decorating products.
# # #
This release contains forward-looking statements relating to future
financial results. Actual financial performance may differ as a
result of factors over which the Company has no control. Additional
information which could affect the Company's financial results is
included in the Company's Securities and Exchange Commission
filings, copies of which are available from Nortek at no charge.
NORTEK, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS
(In Thousands except per share amounts)
<TABLE>
April 4, March 29,
1998 1997
(Unaudited)
<S> <C> <C>
Net Sales $392,468 $194,238
Cost of Sales 294,654 136,986
Selling, General and Administrative
Expenses 75,561 43,078
Amortization of Acquired Goodwill 2,560 712
------- -------
372,775 180,776
------- -------
Operating earnings 19,693 13,462
Interest expense (19,458) (7,323)
Investment income 2,265 1,461
------ ------
Earnings from continuing operations before
provision for income taxes 2,500 7,600
Provision for income taxes 1,200 2,900
------ ------
Earnings from continuing operations 1,300 4,700
Loss from discontinued operations --- (1,000)
---------- ---------
Net Earnings $ 1,300 $ 3,700
========== =========
Net Earnings (loss) Per Share of Common Stock:
Earnings from continuing operations:
Basic $ .14 $ .48
Diluted $ .13 $ .47
Loss from discontinued operations:
Basic $ --- $ (.10)
Diluted $ --- $ (.10)
Net Earnings:
Basic $ .14 $ .38
Diluted $ .13 $ .37
Weighted Average Number of Shares:
Basic 9,540 9,723
Diluted 9,710 9,964
EBITDA from continuing operations $ 29,671 $18,309
</TABLE>
The accompanying notes are an integral part of this unaudited condensed
consolidated summary of operations.
NORTEK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS
A. The unaudited condensed consolidated summary of operations for
Nortek, Inc. and its subsidiaries ("the Company"), in the opinion of
management, reflects all adjustments necessary for a fair statement
of the periods presented. It is suggested that this unaudited
condensed consolidated summary of operations 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 its latest
Securities and Exchange Commission Quarterly Report on Form 10-Q.
B. The following presents the approximate unaudited Pro Forma and As
Adjusted net sales, operating earnings, loss from continuing
operations and diluted loss from continuing operations per share of
the Company for the first quarter of 1997 and gives pro forma effect
to the acquisition of Ply Gem, the sale of $310,000,000 principal
amount of 9 1/8% Notes, the extension of credit under the Ply gem
credit facility to refinance certain existing indebtedness and the
termination of Ply Gem's accounts receivable securitization program,
(all of which occurred in August 1997), the sale of $175,000,000
principal amount of 9 1/4% Notes in March 1997, the refinancing of
certain subsidiary indebtedness, and reflects the estimated cost
reductions as described below as if such transactions and
adjustments had occurred on January 1, 1997.
For the First Quarter of 1997
(In thousands Except Per
Share Amounts)
(unaudited)
<TABLE>
<S> <C>
Pro Forma
---------
Net sales $357,050
Operating earnings 14,700
Loss from continuing operations (3,000)
Diluted loss from continuing operations per share ($ .31)
As Adjusted
-----------
Net sales $357,050
Operating earnings 18,400
Loss from continuing operations (600)
Diluted loss from continuing operations per share ($ .06)
</TABLE>
In computing the pro forma losses, losses have been increased by the
net interest income on the aggregate cash portion of the purchase
price of the acquisition at the historical rate earned by the
Company and interest expense on indebtedness incurred in connection
with the acquisition and the refinancing and repayment of certain
indebtedness of Ply Gem. Losses have been increased by amortization
of goodwill and reflect net adjustments to depreciation expense as a
result of an increase in the estimated fair market value of property
and equipment and changes in depreciable lives. Interest expense on
the subsidiary indebtedness refinanced with funds from the sale of 9
1/4% Notes was excluded at an average interest rate consistent with
the indebtedness outstanding which was refinanced, net of the tax
effect. Interest expense was included on the 9 1/4% Notes
NORTEK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS
(CONTINUED)
at a rate of approximately 9 1/4%, plus amortization of deferred
debt expense and debt discount net of tax effect, and on the 9 1/8%
Notes at a rate of approximately 9 1/8%, plus amortization of
deferred debt expense and debt discount, net of tax effect.
In addition, since the Ply Gem acquisition date, the Company has
realized, and expects to continue to realize, cost savings as a
result of the acquisition. These savings result from several
actions, including: (i) the elimination of expenses associated with
Ply Gem's New York headquarters; (ii) the consolidation of Ply
Gem's corporate functions such as accounting, legal and risk
management into Nortek; and (iii) the identification and
rationalization of under-performing product lines. Pro forma
operating earnings for the first Quarter of 1997 (see above) have
been adjusted for the pro forma effect of estimated cost reductions
directly attributable to the acquisition totaling approximately
$1,667,000. As Adjusted operating earnings for the first Quarter of
1997 (see above) includes cost reductions directly attributable to
the acquisition and additional estimated cost savings related to
expenses associated with the elimination of Ply Gem's New York
headquarters, the consolidation of Ply Gem corporate functions and
the rationalization of certain under-performing product lines which
total approximately $2,757,000.
C. In the fourth quarter of 1997, the Company adopted a plan of
disposition for its Plumbing Products Group and provided a pre-tax
reserve of $2,500,000 for future expenses including interest
expense. In the first quarter of 1998, approximately $475,000 of
corporate interest expense was allocated against this reserve. In
the first quarter of 1997, the loss for discontinued operations
included an allocation of corporate interest expense of
approximately $475,000.
