Nortek release latest financial results
USA – Nortek, Inc., a global diversified industrial company with leading brands and innovative air management and technology-driven solutions for residential and commercial applications, yesterday announced their financial results for the final quarter of 2015 and for the year as a whole.
The company revealed that net sales decreased by 0.9% to $631.0 million, from $636.8 million in the fourth quarter of 2014, meaning that excluding acquisitions, divestitures and the impact of foreign exchange translation, net sales decreased 0.3%. In terms of GAAP operating earnings, the figure was $28.1 million, compared with $29.1 million in the fourth quarter of 2014.
Commenting on the quarterly and overall results, Michael J. Clarke, the president and CEO of Nortek, declared that “The underlying business fundamentals in the fourth quarter were positive. Organic sales growth was strong in our Air Quality, Security and Ergotron businesses led by new product sales and end market demand. In HVAC, underlying order trends are encouraging, though difficult year-over-year comparisons weighed on overall sales growth and operating margin. In Custom Air, the elimination of unprofitable product lines helped improve adjusted operating earnings and we expect continued momentum in the data center cooling market to help drive underlying sales growth for the segment.”
Mr. Clarke continued, adding that “2015 was an important year of transition for Nortek and marks the conclusion of a multi-year restructuring and transformation period. With the right people and processes in place and restructuring costs largely behind us, we believe the business is positioned for growth and improved profitability in 2016.”
The financial report also disclosed that net sales in the Air Quality & Home Solutions (AQH) segment increased 2.8% (7.1% on a constant currency basis) compared with the fourth quarter of 2014, principally due to higher sales in the appliance and wholesale channels. However, in the Residential & Commercial HVAC (RCH) segment, net sales decreased by 11.0% (10.4% on a constant currency basis, excluding acquisitions) from the fourth quarter of 2014, with this drop primarily driven by a pre-buy in the fourth quarter of 2014 related to a regulatory change.
For the year as a whole, net sales decreased by 0.8% to $2,526.1 million, from $2,546.1 million in 2014, however GAAP operating earnings were $85.4 million, compared with $42.9 million in 2014. The yearly figures also showed that adjusted operating earnings were $142.9 million, compared with $163.5 million in 2014.
Mr Clarke also commented on the yearly results and his forecast for 2016, saying “Looking ahead to 2016, we are encouraged by the underlying fundamentals of our business segments, which we believe sets us up for improved financial performance. We have a strong slate of new product introductions and favorable tailwinds in our end markets, which contribute to our positive outlook.”
Clarke concluded by stating “Excluding potential headwinds from foreign exchange translation, we expect to deliver overall net sales growth in 2016 despite planned lower sales related to our restructuring efforts. With increased sales volume and the benefits from our restructuring actions, we expect to achieve growth in both reported and adjusted operating earnings in 2016. Offsetting a portion of this growth will be normal increases in operating expenses and important investments in product development and marketing. Importantly, we anticipate solid free cash flow generation in 2016, benefitting from improved operating performance, the near elimination of restructuring charges and strong working capital management.”