PROVIDENCE, R.I., Aug. 3, 2015 /PRNewswire/ -- Nortek, Inc.
(Nasdaq: NTK), a global diversified industrial company with leading
brands and innovative air management and technology-driven
solutions for residential and commercial applications, today
announced financial results for the three-month period ended
June 27, 2015.
Second Quarter 2015 Consolidated Highlights
- Net sales decreased 2.0% to $703.9
million, from $718.6 million
in the second quarter of 2014. Acquisitions contributed
$27.3 million to net sales for the
second quarter of 2015. Excluding acquisitions and the impact of
foreign exchange translation, net sales decreased 4.2%.
- GAAP operating earnings were $34.7
million, compared with an operating loss of $32.1 million in the second quarter of 2014. The
second quarters of 2015 and 2014 include non-cash impairment
charges of $1.2 million and
$80.4 million, respectively.
Acquisitions contributed $400,000 to
GAAP operating earnings in the second quarter of 2015.
- Adjusted operating earnings* were $53.4
million, compared with $59.2
million in the second quarter of 2014. Adjusted operating
margin was 7.6%, compared with 8.2% in the prior-year period.
Acquisitions contributed $600,000 to
adjusted operating earnings in the second quarter of 2015.
- Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA)* was $83.2
million, compared with $88.6
million in the second quarter of 2014. Adjusted EBITDA
margin was 11.8%, compared with 12.3% in the prior-year period.
Acquisitions contributed $3.1 million
to adjusted EBITDA in the second quarter of 2015.
- GAAP net loss was $2.3 million,
or $0.14 loss per diluted share,
compared with GAAP net loss of $46.2
million, or $2.97 loss per
diluted share, in the second quarter of 2014. In addition to the
non-cash impairment charges noted above, GAAP net losses in the
second quarters of 2015 and 2014 reflect loss from debt
retirement charges of $14.8
million and $1.8 million,
respectively.
- Net cash used in operating activities was $25.6 million, compared with $7.9 million in the second quarter of 2014.
Capital expenditures were $9.9
million, compared with $10.4
million in last year's second quarter. Free cash flow, which
is defined as net cash used in operating activities minus capital
expenditures, was negative $35.5
million, compared with negative $18.3
million in the second quarter of 2014.
- As of June 27, 2015, Nortek had
$26.2 million of unrestricted cash
and cash equivalents on its balance sheet, compared with
$58.4 million on December 31, 2014.
- As of June 27, 2015, Nortek had
$129.0 million of borrowings
outstanding under its ABL facility, including approximately
$50.0 million used for the
acquisition of Anthro Corporation. Nortek had no borrowings
outstanding under its ABL facility on December 31, 2014 and had $134.0 million of borrowings outstanding under
its ABL facility on July 31,
2015.
* See appendix for reconciliation to most comparable GAAP
equivalent.
Management Commentary
"Although four of our five major segments performed as expected
this quarter with some solid underlying growth fundamentals, a
temporary operational setback in our HVAC business weighed on our
overall sales and profitability," said President and Chief
Executive Officer Michael J. Clarke.
"Our Air Quality and Ergonomics businesses delivered solid
year-over-year organic growth in sales plus improved operating
earnings and margins this quarter, and we significantly reduced the
operating loss in our total AV businesses. These improvements were
partially offset by the anticipated decline in our Custom Air
segment related to lower sales to a major customer, as well as a
large concentration of Security segment orders delivered in the
second quarter last year."
"The key challenge we faced this quarter, however, was an
unexpected decline in HVAC segment shipment levels primarily during
April and May, due to the inability of our third-party warehousing
and logistics provider in the residential part of the business to
keep up with the level of order activity during our peak season,"
Clarke said. "We immediately addressed the issue by bringing our
internal HVAC distribution back online, and shipments increased
substantially in June as a result. Nevertheless, we were unable to
fully recover from the lost shipments during the quarter. Based on
our current order flow, backlog and constant communication with our
customers, we believe we have put this issue largely behind us. We
expect a return to normal shipping performance in the HVAC segment
in the second half of 2015."
Clarke added, "We have made a lot of progress streamlining our
portfolio and addressing non-strategic, unprofitable product lines,
including the restructuring of certain of our Custom Air operations
that we announced last quarter. We also just completed the
sale of one of the Audio Video entities. The total operating
loss related to the operations we are restructuring and the entity
we sold was $43.5 million (including
depreciation and amortization and impairment charges of
$6.4 million and restructuring
expenses of $12.0 million) for the
latest twelve months ended June 2015. The planned elimination
of these losses in the future is expected to have a significant
impact on our overall profitability."
Second Quarter 2015 Segment Highlights
- Net sales in the Air Quality & Home Solutions (AQH) segment
increased 0.2% (up 4.0% on a constant currency basis) compared with
the second quarter of 2014. The increase on a constant currency
basis was primarily driven by higher sales in North America into the appliance and wholesale
channels.
- In the Security & Control Solutions (SCS) segment, net
sales declined 10.2% from last year's second quarter, mainly due to
a difficult comparison to the prior year when we shipped a large
concentration of orders in the second quarter of 2014.
- Net sales in the Ergonomic & Productivity Solutions (ERG)
segment were up 23.8% (up 8.5% excluding the Anthro acquisition)
from the second quarter last year. The organic increase in net
sales was mainly driven by higher Ergotron branded sales, partially
offset by lower sales to retail customers.
- In the Residential & Commercial HVAC (RCH) segment, net
sales increased 0.4% (decreased 8.5% on a constant currency basis,
excluding acquisitions) compared with the second quarter of 2014.
The Company believes the organic decrease in sales was primarily
driven by approximately $15 to $20
million of lost sales related to the problems experienced
with the move to a third-party logistics provider, as discussed
above.
- Net sales in the Custom & Commercial Air Solutions (CAS)
segment were down 11.4% (8.4% lower on a constant currency basis)
compared with the second quarter of 2014. The decrease reflected
the anticipated decline in sales to a major U.S. semiconductor
capital equipment customer whose product demand in 2014 was
concentrated in the first half and is cyclical in
nature. Excluding sales to this customer and the impact of
foreign exchange translation, net sales increased $10.5 million, or 10.6%, in the second quarter of
2015.
- In the Audio, Video & Control Solutions (AVC) segments, net
sales decreased 2.7% compared with last year's second quarter. The
decrease reflected lower sales of professional video signal
management products, partially offset by strong year-over-year
growth in the residential portion of AVC.
Management Comments on the Outlook
"Looking ahead to the back-half of the year, we are confident in
our direction," Clarke said. "Conditions in the residential and
nonresidential construction markets remain favorable, and we expect
to see the benefits of lower raw material prices and our
restructuring efforts flow through in the third and fourth
quarters."
"In addition, we expect favorable sales comparisons in the
Custom Air business given our level of backlog and the fact that
the headwind from our major semiconductor capital equipment
customer is largely behind us this year," said Clarke. "Product
demand in Air Quality is growing, and important new product
introductions are expected to accelerate our momentum in that
business. Although the HVAC segment faces a difficult
year-over-year comparison in the fourth quarter, we expect shipping
patterns to normalize, while anticipated efficiencies in our
Mexican operations should enhance the segment's profitability. We
continue to anticipate increased demand, year-over-year, in the
markets served by our Security and Ergonomics businesses during the
second half, leading to solid performance in those segments for
2015 as a whole."
"In summary, the underlying trends in our end markets are
favorable, we have exciting new products in the pipeline, and
actions underway to significantly improve our cost position,"
Clarke said. "As a result, Nortek is well-positioned to deliver
growth in profitability and maximize long-term value for our
shareholders."
Outlook
Given that its first-half operating results are not indicative
of its anticipated performance for the full-year, and due to
unusual factors that affected its first half, the Company is
providing guidance for the full year ending December 31, 2015 as follows:
- Net sales are expected to be in the range of $2.5 billion to $2.575 billion.
- Adjusted EBITDA is expected to be in the range of $290 million to $300
million.
- The above range of adjusted EBITDA includes approximately
$18 million to $20 million of
adjusted EBITDA losses on businesses that are being restructured
and the AVC entity sold.
The Company does not anticipate providing guidance on an
on-going basis and does not undertake a duty to update this
guidance.
Conference Call Details
Nortek has scheduled a conference call to review its
second-quarter 2015 results tomorrow, August
4, 2015, at 9:00 a.m. ET.
Those who wish to listen to the conference call webcast should
visit the Investor Relations section of the Company's website at
www.nortek.com. The live call also can be accessed by dialing (877)
709-8155 or (201) 689-8881 prior to the start of the call. For
those who are unable to listen to the live call, the webcast will
be archived on the Company's website. An accompanying slide
presentation also will be available on the website.
About Nortek
Nortek is a global, diversified industrial company whose many
market-leading brands deliver broad capabilities and a wide array
of innovative, technology-driven products and solutions for
lifestyle improvement at home and at work. The Company's broad
array of offerings includes ventilation products such as range
hoods and bathroom fans, security and audio/video solutions,
heating and cooling products, air management systems, and ergonomic
and productivity solutions.
As used herein, the term "Nortek" refers to Nortek, Inc.,
together with its subsidiaries, unless the context indicates
otherwise. This term is used for convenience only and is not
intended as a precise description of any of the separate
corporations, each of which manages its own affairs.
Safe Harbor Statement
In this press release, we discuss and analyze the results of
operations and financial condition of Nortek, Inc. and its wholly
owned subsidiaries. In addition to historical information, we also
make statements relating to the future, called "forward-looking"
statements, which are provided under the "safe harbor" protection
of the U.S. Private Securities Litigation Reform Act of 1995. When
used in this press release, words such as "anticipate," "believe,"
"could," "estimate," "expect," "feel," "intend," "may," "plan,"
"potential," "project," "seek," "should," "will," or "would" and
similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. These statements are based on Nortek's
current plans and expectations and involve risks and uncertainties,
over which we have no control, 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 operating
results to differ include: global economic conditions; the level of
domestic and foreign construction and remodeling activity affecting
residential and commercial markets; the availability and cost of
certain raw materials and purchased components (including, among
others, steel, copper, aluminum, electronics, motors, plastics,
compressors, various chemicals and paints, and packaging);
compliance with conflict minerals regulations; weather
fluctuations; acquisition and integration risks; the success of our
operational improvement initiatives; potential restructurings and
business shutdowns; competition; foreign economic and political
conditions; increased costs associated with regulatory compliance,
including environmental, health and safety laws and the U.S.
Foreign Corrupt Practices Act; foreign currency fluctuations;
international business practices; maintaining good relationships
with customers and suppliers; labor disruptions; product
innovations and improvements; product and warranty liability
claims; product recalls or reworks; employment levels; intellectual
property rights; security breaches; maintaining pension plans;
changes in tax law; our ability to normalize shipping performance
in the RCH segment; and our ability to service our indebtedness.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
Nortek undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise. For further information, readers are
urged to carefully review and consider the reports and filings of
Nortek with the Securities and Exchange Commission including the
description of "risk factors" set forth under Item 1A in our Annual
Report on Form 10-K and any further disclosures the Company makes
on related subjects in subsequent reports filed with the
SEC.
NORTEK, INC. AND
SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS
|
|
|
|
|
|
For the second
quarter ended
|
|
|
June 27,
2015
|
|
June 28,
2014
|
|
|
(Dollar amounts in
millions, except per share data)
|
|
|
|
|
|
Net Sales
|
|
$
|
703.9
|
|
|
$
|
718.6
|
|
Cost of products
sold
|
|
505.8
|
|
|
509.0
|
|
Gross
profit
|
|
198.1
|
|
|
209.6
|
|
Selling, general and
administrative expense, net
|
|
146.1
|
|
|
146.1
|
|
Impairment of
long-lived assets and goodwill
|
|
1.2
|
|
|
80.4
|
|
Amortization of
intangible assets
|
|
16.1
|
|
|
15.2
|
|
Operating earnings
(loss)
|
|
34.7
|
|
|
(32.1)
|
|
Net interest
expense
|
|
(24.9)
|
|
|
(26.6)
|
|
Loss from debt
retirement
|
|
(14.8)
|
|
|
(1.8)
|
|
Loss before benefit
from income taxes
|
|
(5.0)
|
|
|
(60.5)
|
|
Benefit from income
taxes
|
|
(2.7)
|
|
|
(14.3)
|
|
Net
loss
|
|
$
|
(2.3)
|
|
|
$
|
(46.2)
|
|
|
|
|
|
|
Basic loss per
share
|
|
$
|
(0.14)
|
|
|
$
|
(2.97)
|
|
|
|
|
|
|
Diluted loss per
share
|
|
$
|
(0.14)
|
|
|
$
|
(2.97)
|
|
|
|
|
|
|
Weighted Average
Common Shares:
|
|
|
|
|
Basic
|
|
15,953,059
|
|
|
15,557,173
|
|
Diluted
|
|
15,953,059
|
|
|
15,557,173
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of these unaudited condensed
consolidated financial statements.
|
NORTEK, INC. AND
SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(Dollar amounts in
millions)
|
|
|
|
|
|
|
|
June 27,
2015
|
|
December 31,
2014
|
ASSETS
|
Current
Assets:
|
|
|
|
|
Unrestricted cash and
cash equivalents
|
|
$
|
26.2
|
|
|
$
|
58.4
|
|
Restricted
cash
|
|
0.3
|
|
|
0.6
|
|
Accounts receivable,
less allowances
|
|
422.4
|
|
|
324.9
|
|
Net
inventories
|
|
394.4
|
|
|
374.3
|
|
Prepaid
expenses
|
|
19.3
|
|
|
18.4
|
|
Other current
assets
|
|
14.4
|
|
|
10.1
|
|
Tax refunds
receivable
|
|
8.2
|
|
|
8.0
|
|
Deferred tax
assets
|
|
37.5
|
|
|
28.1
|
|
Total current
assets
|
|
922.7
|
|
|
822.8
|
|
|
|
|
|
|
Long-Term
Assets:
|
|
|
|
|
Total property and
equipment, net
|
|
228.1
|
|
|
238.0
|
|
Goodwill
|
|
499.5
|
|
|
474.3
|
|
Intangible assets,
less accumulated amortization
|
|
630.7
|
|
|
642.6
|
|
Deferred debt
expense
|
|
15.1
|
|
|
17.3
|
|
Other
assets
|
|
15.2
|
|
|
14.1
|
|
|
|
1,388.6
|
|
|
1,386.3
|
|
Total
Assets
|
|
$
|
2,311.3
|
|
|
$
|
2,209.1
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' INVESTMENT
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Short-term bank
obligations
|
|
$
|
0.3
|
|
|
$
|
0.6
|
|
Current maturities of
long-term debt
|
|
7.9
|
|
|
6.3
|
|
Accounts
payable
|
|
293.2
|
|
|
288.8
|
|
Accrued expenses and
taxes
|
|
216.7
|
|
|
222.4
|
|
Total current
liabilities
|
|
518.1
|
|
|
518.1
|
|
|
|
|
|
|
Other
Liabilities:
|
|
|
|
|
Deferred income
taxes
|
|
117.5
|
|
|
123.5
|
|
Other
|
|
177.7
|
|
|
185.9
|
|
|
|
295.2
|
|
|
309.4
|
|
|
|
|
|
|
Notes, Mortgage Notes
and Obligations Payable, Less Current Maturities
|
|
1,473.8
|
|
|
1,339.4
|
|
|
|
|
|
|
Total stockholders'
investment
|
|
24.2
|
|
|
42.2
|
|
Total Liabilities
and Stockholders' Investment
|
|
$
|
2,311.3
|
|
|
$
|
2,209.1
|
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of these unaudited condensed
consolidated financial statements.
|
NORTEK, INC. AND
SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
|
|
|
|
For the second
quarter ended
|
|
|
June 27,
2015
|
|
June 28,
2014
|
|
|
(Dollar amounts in
millions)
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net cash used in
operating activities
|
|
$
|
(25.6)
|
|
|
$
|
(7.9)
|
|
Cash flows from
investing activities:
|
|
|
|
|
Capital
expenditures
|
|
(9.9)
|
|
|
(10.4)
|
|
Net cash paid for
businesses acquired
|
|
—
|
|
|
(254.9)
|
|
Proceeds from the
sale of property and equipment
|
|
—
|
|
|
0.3
|
|
Change in restricted
cash and marketable securities
|
|
—
|
|
|
0.3
|
|
Other, net
|
|
(0.7)
|
|
|
(1.1)
|
|
Net cash used in
investing activities
|
|
(10.6)
|
|
|
(265.8)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from ABL and
other borrowings
|
|
128.5
|
|
|
100.8
|
|
Payment of ABL and
other borrowings
|
|
(106.4)
|
|
|
(41.5)
|
|
Redemption of the 10%
Senior Notes due 2018, including
redemption
premium
|
|
(262.5)
|
|
|
—
|
|
Net proceeds from
borrowings under the senior secured term loan
facility due 2020
|
|
261.8
|
|
|
349.1
|
|
Redemption of the
senior secured term loan facility due 2017
|
|
—
|
|
|
(93.0)
|
|
Fees paid in
connection with debt facilities
|
|
(2.7)
|
|
|
(5.9)
|
|
Net use from equity
transactions
|
|
(0.1)
|
|
|
0.3
|
|
Excess tax benefit on
share-based awards
|
|
—
|
|
|
3.8
|
|
Other, net
|
|
0.1
|
|
|
0.3
|
|
Net cash provided by
financing activities
|
|
18.7
|
|
|
313.9
|
|
Net change in
unrestricted cash and cash equivalents
|
|
(17.5)
|
|
|
40.2
|
|
Unrestricted cash and
cash equivalents at the beginning of the period
|
|
43.7
|
|
|
51.1
|
|
Unrestricted cash and
cash equivalents at the end of the period
|
|
$
|
26.2
|
|
|
$
|
91.3
|
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of these unaudited condensed
consolidated financial statements.
|
NORTEK, INC. AND
SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS
(A) Nortek, Inc. ("Nortek") and all of its wholly owned
subsidiaries, collectively the "Company," is a global, diversified
company whose many market-leading brands deliver broad capabilities
and a wide array of innovative, technology-driven products and
solutions for lifestyle improvement at home and at work. Operating
within five primary reporting segments, the Company manufactures
and sells, primarily in the United
States, Canada and
Europe, with additional
manufacturing in China and
Mexico, a wide variety of products
for the remodeling and replacement markets, the residential and
commercial new construction markets, the manufactured housing
market, and the personal and enterprise computer markets.
The Company operates on a calendar year, and each interim period
is comprised of two 4-week periods and one 5-week period, with each
week ending on a Saturday. The Company's fiscal year always begins
on January 1 and ends on December
31. As a result, the Company's first and fourth quarters may
have more or less days included than a traditional 4-4-5 fiscal
calendar, which consists of 91 days. The three months ended
June 27, 2015 ("second quarter of 2015") and June 28,
2014 ("second quarter of 2014") each include 91 days.
The accompanying unaudited condensed consolidated summary of
operations reflects the accounts of Nortek and all of its
wholly-owned subsidiaries after elimination of intercompany
accounts and transactions. Certain amounts in the prior years'
consolidated financial statements have been reclassified to conform
to the current year presentation.
This unaudited condensed consolidated summary of operations
should be read in conjunction with the consolidated financial
statements and the notes included in the Company's latest annual
report on Form 10-K, as may be updated by quarterly reports on Form
10-Q, and current reports on Form 8-K as filed with the Securities
and Exchange Commission.
(B) The Company has supplemented the reporting of financial
information determined under U.S. generally accepted accounting
principles ("GAAP") with certain non-GAAP financial measures, which
the Company refers to as "adjusted" measures, including adjusted
operating earnings and adjusted EBITDA (earnings before interest,
taxes, depreciation and amortization). Adjusted operating
earnings is defined as operating earnings as reported, adjusted to
exclude certain cash and non-cash, non-recurring items that are
otherwise included in operating earnings. Adjusted EBITDA is
defined as adjusted operating earnings, further adjusted to exclude
depreciation and amortization expense, and share-based compensation
expense.
Adjusted operating earnings and EBITDA are not defined terms
under GAAP. Neither should be considered as an alternative to
operating earnings or net earnings (loss) as a measure of operating
results. There are material limitations associated with making the
adjustments to the Company's earnings to calculate adjusted
operating earnings and EBITDA, and using these non-GAAP financial
measures as compared to the most directly comparable GAAP financial
measures. For instance, adjusted operating earnings and EBITDA do
not include:
- interest expense, and, because the Company has borrowed money
in order to finance its operations, interest expense is a necessary
element of the Company's costs and ability to generate
revenue;
- income tax expense, and because the payment of taxes is part of
the Company's operations, tax expense is a necessary element of its
costs and ability to operate; or
- certain cash and non-cash, non-recurring items, and share-based
compensation expense, and, because such items can, at times, affect
the Company's operating results, the exclusion of such items is a
material limitation.
Further, adjusted EBITDA does not include depreciation and
amortization expense, and, because the Company uses capital assets,
depreciation and amortization expense is a necessary element of its
costs and ability to generate revenue.
The Company presents adjusted operating earnings and EBITDA
because it considers them important supplemental measures of its
performance and believes they are frequently used by the Company's
investors and other interested parties, as well as by management,
in the evaluation of other companies in its industry. In
addition, adjusted operating earnings and EBITDA provide additional
information used by the Company's management and Board of Directors
to facilitate internal comparisons to historical operating
performance of prior periods. Further, management believes
that adjusted operating earnings and EBITDA facilitate operating
performance comparisons from period to period because they exclude
potential differences caused by variations in capital structure
(affecting interest expense), tax positions (such as the impact of
changes in effective tax rates or net operating losses) and the age
and book depreciation of facilities and equipment (affecting
depreciation expense).
While adjusted operating earnings and EBITDA are frequently used
as measures of operations and the ability to meet debt service
requirements by other companies, the Company's use of this
financial measure is not necessarily comparable to such other
similarly titled captions of other companies. These non-GAAP
financial measures reflect an additional way of viewing aspects of
operations that, when viewed with GAAP results, provide a more
complete understanding of the business. The company strongly
encourages investors and shareholders to review company financial
statements and publicly-filed reports in their entirety and not to
rely on any single financial measure.
The following table reconciles operating earnings to adjusted
operating earnings and EBITDA for the second quarters ended
June 27, 2015 and June 28, 2014:
|
|
For the second
quarter ended
|
|
|
June 27,
2015
|
|
June 28,
2014
|
|
|
(Dollar amounts in
millions)
|
|
|
|
|
|
Operating earnings
(loss)
|
|
$
|
34.7
|
|
|
$
|
(32.1)
|
|
Restructuring and
transformation charges (a)
|
|
17.1
|
|
|
7.7
|
|
Other
Adjustments:
|
|
|
|
|
Non-cash impairment
charges
|
|
1.2
|
|
|
80.4
|
|
Non-recurring losses
(gains) (b)
|
|
1.0
|
|
|
(0.3)
|
|
Acquisition fees and
expenses
|
|
0.3
|
|
|
3.7
|
|
Gain on sale of
assets
|
|
—
|
|
|
(0.1)
|
|
Joint venture
income
|
|
(0.5)
|
|
|
—
|
|
Net foreign exchange
gains (c)
|
|
(0.4)
|
|
|
(0.1)
|
|
Subtotal - Other
Adjustments
|
|
1.6
|
|
|
83.6
|
|
Adjusted Operating
Earnings
|
|
53.4
|
|
|
59.2
|
|
Depreciation and
amortization expense
|
|
28.2
|
|
|
27.2
|
|
Share-based
compensation expense
|
|
1.6
|
|
|
2.2
|
|
Adjusted EBITDA
(d)
|
|
$
|
83.2
|
|
|
$
|
88.6
|
|
(a) Includes all restructuring charges, including
severance, relocation and transformation/transition
costs. Costs associated with these activities for the second
quarters ended June 27, 2015 and June 28, 2014 were as
follows:
|
|
For the second
quarter ended
|
|
|
June 27,
2015
|
|
June 28,
2014
|
|
|
(Dollar amounts in
millions)
|
Subsidiary
Combinations
|
|
$
|
0.1
|
|
|
$
|
0.7
|
|
Manufacturing
Rationalization & Relocation Initiatives
|
|
2.7
|
|
|
3.2
|
|
Warehousing &
Distribution Consolidation
|
|
4.9
|
|
|
0.2
|
|
CAS Segment
Consolidation
|
|
5.0
|
|
|
—
|
|
Other operational
improvement initiatives
|
|
1.3
|
|
|
3.6
|
|
All other exit and
disposal activities
|
|
3.1
|
|
|
—
|
|
|
|
$
|
17.1
|
|
|
$
|
7.7
|
|
(b) For the second quarter ended June 27, 2015, this amount
includes approximately $0.4 million
in legal and other professional services incurred related to the
FCPA investigation in the SCS segment, approximately $0.7 million of charges associated with executive
transition employment and separation agreement costs and other fees
within Unallocated, and accretion of approximately $(0.1) million to record leasehold fair value
adjustments.
For the second quarter ended June 28, 2014, this amount
includes accretion of approximately $(0.3)
million to record leasehold fair value adjustments.
(c) Non-cash foreign exchange (gains) losses relate to
intercompany debt not indefinitely invested in our
subsidiaries.
(d) See the Company's Form 10-Q for the quarterly period
ended June 27, 2015 for information pertaining to the pro
forma effect of acquisitions, which is not reflected in the above
presentation of Adjusted EBITDA.
(C) As noted previously, the Company is providing guidance
of the full year ending December 31,
2015. The following table presents a reconciliation
from the estimated range of operating earnings to the estimated
range of adjusted EBITDA for the year ending December 31, 2015:
|
|
Low
|
|
High
|
|
|
(Dollar amounts in
millions)
|
|
|
|
|
|
Operating
earnings
|
|
$
|
107.9
|
|
|
$
|
117.9
|
|
Restructuring and
transformation charges
|
|
56.5
|
|
|
56.5
|
|
Non-cash impairment
charges
|
|
1.2
|
|
|
1.2
|
|
Other non-recurring
losses
|
|
4.7
|
|
|
4.7
|
|
Adjusted Operating
Earnings
|
|
170.3
|
|
|
180.3
|
|
Depreciation and
amortization expense
|
|
111.9
|
|
|
111.9
|
|
Share-based
compensation expense
|
|
7.8
|
|
|
7.8
|
|
Adjusted
EBITDA
|
|
$
|
290.0
|
|
|
$
|
300.0
|
|
Contact:
Michael Botelho
Vice President, Strategy and Investor Relations
Nortek, Inc.
401.751.1600
michael.botelho@nortek.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nortek-reports-second-quarter-2015-results-300122802.html
SOURCE Nortek, Inc.