SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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):
April 22, 1999
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NORTEK, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 1-6112 05-0314991
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) I.D. Number)
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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
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Item 5. Other Events
Nortek, Inc. is filing herewith an amendment to its Bylaws as Exhibit 3.1
which is incorporated herein by reference and which was adopted by the Board of
Directors and made effective upon filing with the Securities and Exchange
Commission.
Nortek, Inc. is filing herewith a press release issued April 22, 1999 by
the Company as Exhibit 99 which is incorporated herein by reference. This press
release was issued to report first quarter 1999 earnings.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 3.1 Amendment to Bylaws of Nortek,
Inc.
Exhibit 99 Press release issued by
Nortek, Inc. on April 22, 1999.
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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.
April 23, 1999 By:/s/ Richard J. Harris
Date ----------------------------
Name: Richard J. Harris
Title: Vice President and Treasurer
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Exhibit 3.1
Amendment to By-Laws of Nortek, Inc. (as adopted by the Board of Directors on
3/22/99 and made effective upon filing with the Securities and Exchange
Commission)
Delete existing Section 2.9 and replace it in its entirety with the following
language:
2.9 Proxy Representation. Every stockholder may authorize another person or
persons to act for him by proxy in all matters in which a stockholder is
entitled to participate, whether by waiving notice of any meeting,
objecting to or voting or participating at a meeting, or expressing consent
or dissent without a meeting. The delivery of a proxy on behalf of a
stockholder consistent with telephonic or electronically transmitted
instructions obtained pursuant to procedures of the corporation reasonably
designed to verify that such instructions have been authorized by such
stockholder shall constitute execution and delivery of the proxy by or on
behalf of the stockholder. No proxy shall be voted or acted upon after
three years from its date unless such proxy provides for a longer period. A
duly executed proxy shall be irrevocable if it states that it is
irrevocable and, if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A proxy may be made
irrevocable regardless of whether the interest with which it is coupled is
an interest in the stock itself or an interest in the corporation
generally. The authorization of a proxy may but need not be limited to
specified action, provided, however, that if a proxy limits its
authorization to a meeting or meetings of stockholders, unless otherwise
specifically provided such proxy shall entitle the holder thereof to vote
at any adjourned session but shall not be valid after the final adjournment
thereof. A proxy purporting to be authorized by or on behalf of a
stockholder, if accepted by the corporation in its discretion, shall be
deemed valid unless challenged at or prior to its exercise, and the burden
of proving invalidity shall rest on the challenger.
Add the following new Section 2.12 after Section 2.11:
2.12 Stockholder Meeting Business. At any meeting of the stockholders, only such
business shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting, business must be
(a) specified in the notice of meeting (or any supplement thereto) given by
or at the direction of the board of directors or (b) otherwise properly
brought before the meeting by a stockholder. For business to be properly
brought before an annual meeting by a stockholder, the stockholder must
have given timely notice thereof in writing to the secretary of the
corporation. To be timely, a stockholder's notice must be delivered to or
mailed and received at the principal executive offices of the corporation,
not less than forty-five days before the date on which the corporation
first mailed its notice for the prior year's annual meeting; provided,
however, that if the date of the annual meeting is changed by more than
thirty days from the prior year, notice by the stockholder to be timely
must be received not later than the close of business on the tenth day
following the day on which notice of the annual meeting is mailed or public
disclosure of the date of the meeting is given or made to stockholders. A
stockholder's notice to the secretary shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the annual meeting
and the reasons for conducting such business at the annual meeting, (b) the
name and address, as they appear on the corporation's books, of the
stockholder proposing such business, (c) the class and number of shares of
the corporation which are beneficially owned by the stockholder, and (d)
any material interest of the stockholder in such business. To be properly
brought before a special meeting, business must be specified in the notice
of meeting (or any supplement thereto) given by or at the direction of the
board of directors. Notwithstanding anything in these by-laws to the
contrary, no business shall be conducted at any meeting of the stockholders
except in accordance with the procedures set forth in this Section 2.12.
The officer presiding at a meeting of the stockholders shall, if the facts
warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of
this Section 2.12, and if he should so determine, he shall so declare to
the meeting and any such business not properly brought before the meeting
shall not be transacted.
Exhibit 99
[letterhead of Nortek, Inc.]
Richard L. Bready, Chairman
Richard J. Harris, Vice President and Treasurer
(401) 751-1600
IMMEDIATE
NORTEK REPORTS STRONG 1ST QUARTER
EARNINGS INCREASE
NET EARNINGS UP 169 PERCENT
EARNINGS PER SHARE DOUBLE
PROVIDENCE, RI, April 22, 1999--Nortek, Inc. (NYSE:NTK), showing growth in sales
and earnings in all of the Company's core businesses, today announced
first-quarter 1999 diluted per-share earnings of $.29, more than double diluted
earnings per share of $.13 for the first quarter of 1998. Nortek is a leading
manufacturer and distributor of high-quality building products.
Other financial highlights of the quarter included:
o Net sales of $406.7 million, compared to $392.5 million reported for
the first quarter of 1998. The first quarter of 1999 includes $68.6
million of sales from acquisitions, while the first quarter of 1998
includes $71.4 million of sales from businesses sold.
o Operating earnings of $27.6 million, a 40.2-percent increase from last
year's $19.7 million. As a percent of sales, operating earnings rose to
6.8 percent compared to 5.0 percent last year.
- m o r e -
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o EBITDA from continuing operations of $40.7 million, a 37.0-percent
increase from $29.7 million for the prior year. As a percent of sales
EBITDA from continuing operations were 10.0 percent compared to last
year's 7.6 percent.
o Net earnings of $3.5 million, an increase of 169.0 percent from last
year's $1.3 million.
o Diluted earnings per share more than doubled on 2,215,000 more shares
outstanding. Diluted EPS for the first quarter of 1999 and the first
quarter of 1998 are after amortization of goodwill and other intangible
assets of $.40 per share and $.30 per share, respectively.
Mr. Richard L. Bready, Chairman and Chief Executive Officer, said,
"First-quarter results reflect the Company's ongoing ability to meld the
internal growth of our core businesses with the synergies of our recent
acquisitions. Given the adverse weather conditions during the quarter in certain
parts of the country, we are pleased that the Company was still able to deliver
strong operating results in all parts of the business. We also continue to make
strides in improving business efficiencies. Our strategy for growth, overall
strong U.S. economic conditions, and heavy activity in Nortek's markets give us
confidence in a strong 1999 and beyond."
Operating results, due to the seasonal nature of Nortek's Windows, Doors and
Siding Group, with its heavy concentration in the upper mid-west and northeast
regions of the country, are normally lower in the first quarter of each year
than the results expected in other quarters.
- P a g e 2 -
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In April, 1999 Nortek announced it had agreed to acquire three businesses from
Caradon plc: Peachtree Doors and Windows, Thermal-Gard and Caradon Windows and
Doors Canada. The Federal Trade Commission has terminated the waiting period
under the Hart Scott Rodino Act with respect to this proposed acquisition and
the acquisition is expected to close shortly.
Nortek is a leading international manufacturer and distributor of high-quality,
competitively priced building, remodeling and indoor environmental control
products for the residential and commercial markets. The Company offers a broad
array of products for improving the environments where people live and work. Its
products include range hoods and other spot ventilation products, heating and
air conditioning systems, wood and vinyl windows and doors, vinyl siding
products, indoor air quality systems, and specialty electronic products.
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Words such as "expects,"
"anticipates," "intends," "plans," "estimates," or similar expressions are
intended to identify these forward-looking statements. These statements are
based on the Company's current plans and expectations and involve risks and
uncertainties that could cause actual future activities and results of
operations to be materially different from those set forth in the
forward-looking statements. Important factors that could cause actual future
activities and results to differ include the availability and cost of certain
raw materials (including among others steel, copper, packaging materials,
plastic, resins, glass, wood and aluminum) and purchased components, the level
of domestic and foreign construction and remodeling activity affecting
residential and commercial markets, interest rates, employment, inflation, Y2K
readiness, currency translation, consumer spending levels, operating in
international economies, the rate of sales growth, price and product liability
claims. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. For further information, please refer to the Company's
reports and filings with the Securities and Exchange Commission.
# # #
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NORTEK, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS
(In Thousands except per share amounts)
For the Three
Months Ended
April 3, April 4,
1999 1998
(Unaudited)
Net sales............................. $406,700 $392,468
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Cost of sales......................... 296,916 294,320
Selling, general and administrative
expenses............................ 77,383 75,561
Amortization of goodwill and
intangible assets..................... 4,784 2,894
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379,083 372,775
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Operating earnings.................... 27,617 19,693
Interest expense...................... (23,966) (19,458)
Investment income..................... 2,849 2,265
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Earnings before provision for income
taxes................................. 6,500 2,500
Provision for income taxes............ 3,000 1,200
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Net earnings.......................... $ 3,500 $1,300
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Net earnings per share of common stock:
Basic............................... $.30 $.14
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Diluted............................. $.29 $.13
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Weighted average number of shares:
Basic............................... 11,747 9,540
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Diluted............................. 11,925 9,710
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EBITDA from continuing operations.... $ 40,658 $ 29,671
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The accompanying notes are an integral part of this unaudited condensed
consolidated summary of operations.
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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,
and its latest Quarterly Report on Form 10-Q.
B. EBITDA from continuing operations is operating earnings plus depreciation
and amortization expense (other than amortization of deferred debt expense
and debt discount).
C. On July 31, 1998, the Company, through a wholly-owned subsidiary, purchased
all of the issued and outstanding capital stock of NuTone Inc. ("NuTone"),
a wholly owned subsidiary of Williams plc ("Williams") for an aggregate
purchase price of $242,500,000 in cash plus approximately $5,500,000 in
expenses and fees. The purchase price was funded through the use of the net
proceeds from the sale of $210,000,000 principal amount of 8 7/8% Senior
Notes due August 1, 2008 (the "8 7/8% Notes") at a slight discount, which
occurred on July 31, 1998, in a private Rule 144A offering to qualified
investors together with approximately $44,800,000 of the cash proceeds
received from the Common Stock Offering as defined below.
D. The following presents the approximate unaudited Pro Forma net sales,
depreciation and amortization expense (other than amortization of deferred
debt expense and debt discount), operating earnings, earnings from
continuing operations and diluted earnings from continuing operations per
share of the Company for the three months ended April 4, 1998 and the year
ended December 31, 1998 which gives pro forma effect to the sale of
2,182,500 shares of the Company's common stock in the second quarter of
1998 (the "Common Stock Offering"), the sale of the 8 7/8% Notes and the
acquisition of NuTone on July 31, 1998, and reflects the estimated cost
reductions directly attributable to the NuTone acquisition as described
below as if such transactions had occurred on January 1, 1998. Pro forma
operating results do not give pro forma effect to dispositions of
businesses that occurred in 1998, the acquisition of Napco, Inc. which
occurred on October 9, 1998 and acquisitions in 1999.
Three Months Year Ended
Ended December 31,
April 4, 1998 1998
(In thousands except per
share amounts)
Pro Forma
Net sales.................... $442,000 $1,849,000
Depreciation and amortization 12,200 47,400
expense......................
Operating earnings........... 23,000 142,500
Earnings from continuing
operations................... 500 31,400
Diluted earnings from
continuing
operations per share..... $ .04 $2.63
<PAGE>
NORTEK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS
(CONTINUED)
At the date of the NuTone acquisition, the Company achieved cost reductions
directly attributable to the acquisition from the elimination of fees and
charges paid by NuTone to Williams and related entities. The unaudited Pro
Forma operating earnings have been increased for the year ended December
31, 1998 and the three months ended April 4, 1998 by approximately $354,000
and $482,000, respectively. Subsequent to the NuTone acquisition, the
Company expects to realize approximately $15,000,000 in unaudited estimated
annual cost reductions ("NuTone Cost Reductions") that can be achieved as a
result of integrating NuTone into the Company's operations. Pro forma
earnings have not been increased for the NuTone Cost Reductions for the
periods presented, except for NuTone Cost Reductions actually achieved
since the date of acquisition. The NuTone Cost Reductions are estimates and
actual savings achieved could differ materially. In computing the pro forma
earnings, earnings have been reduced by interest expense on indebtedness
incurred in connection with the acquisition. Earnings have also been
reduced by amortization of goodwill and intangible assets 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 was included on the 8 7/8% Notes at the
applicable coupon rate plus amortization of deferred debt expense and debt
discount, net of tax effect. The pro forma information presented does not
purport to be indicative of the results which would have been reported if
these transactions had occurred on January 1, 1998, or which may be
reported in the future.
E. Net sales for the Company's principal segments for the three months ended
April 3, 1999 and April 4, 1998 were as follows:
Three Months Ended
April 3, April 4,
1999 1998
(In millions)
Residential Building Products.... $154.3 $105.1
Air Conditioning and Heating
Products....................... 116.4 100.9
Windows, Doors and Siding........ 117.4 99.2
Other............................ 18.6 15.9
Businesses Sold.................. --- 71.4
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Total.................. $406.7 $392.5
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In the first quarter of 1999, acquisitions contributed approximately $68.6
million to net sales, of which approximately $48.1 million was in the
Residential Building Products Segment, $1.8 million was in the Air
Conditioning and Heating Products Segment and $18.7 million was in the
Windows, Doors and Siding Segment.
