Nortek Reports Positive Q1 2016 Results
Net sales increased 7.2% to $613.9 million, from $572.7 million in the first quarter of 2015.
For its first quarter ended April 2, Nortek reported GAAP operating earnings of $28.9 million, compared with $7.7 million in the first quarter of 2015. Excluding the impact of acquisitions and divestitures, operating earnings were $30.3 million, compared with $8.3 million in the same period the year prior.
PROVIDENCE, R.I. – Nortek (NASDAQ: NTK) on Thursday reported first quarter net income of $2.6 million, after reporting a loss in the same period a year earlier.
The global diversified industrial company, with brands and air management and technology-driven solutions for residential and commercial applications, reported net income of 16 cents per share and revenue of $613.9 million in the period.
Net sales increased 7.2% from $572.7 million in the first quarter of 2015. Excluding acquisitions, divestitures and the impact of foreign exchange translation, net sales increased 8.2%. The first quarter of 2016 included five additional shipping days as compared to the prior year period.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $60.2 million, compared with $46.0 million in the first quarter of 2015. Excluding acquisitions and divestitures, adjusted EBITDA was $60.7 million, compared with $46.4 million in the first quarter of 2015.
“We started the year with positive momentum, posting solid first quarter financial performance led by market demand, innovation across our businesses and the benefits of our transformation efforts,” Nortek President and CEO Michael J. Clarke said in a prepared statement. “We were especially pleased to deliver strong organic net sales growth of 8% and organic adjusted EBITDA growth of 31% over the prior year period.”
Among its first quarter 2016 segment highlights, the company reported:
Security & Control Solutions: net sales increased 14.4% (13% excluding the Numera acquisition) from the first quarter of 2015. The increase was mainly attributable to higher volume with its largest OEM customer, as well as strong demand from distributor and dealer accounts.
Residential & Commercial HVAC: net sales increased 10.3% (11.3% on a constant currency basis) from the first quarter of 2015. The increase was primarily driven by higher volume in the residential business, partially offset by lower commercial sales, including the impact of the mild weather experienced in this year’s first quarter.
Audio, Video & Control Solutions: net sales decreased 17.8% (6.5% excluding the divested TV One business) compared with the first quarter of 2015. The organic decrease was primarily driven by lower sales of commercial A/V products, which is a product category the company said “is rationalizing.”
Nortek shares have climbed almost 6% since the beginning of the year. In the final minutes of trading on Thursday, shares hit $46.12, a drop of 41% in the previous 12 months.
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About the Author
Rodney Bosch, Senior Editor
Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.
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