Nortek Q4 Loss Narrows, Says Cautiously Optimistic About End-market Conditions

(RTTNews) - Nortek, Inc. (NTK) on Tuesday reported a loss for the fourth quarter that narrowed from last year, helped by higher sales at all five of its segments. Looking ahead, the building materials company said it remained "cautiously optimistic" about end-market conditions for full-year 2014.

Michael Clarke, President and Chief Executive Officer of Nortek said, "Net sales were up from the fourth quarter last year in all five segments. Overall, market conditions for our businesses have been improving, with U.S. residential construction activity and HVAC demand leading the way."

The Providence, Rhode Island-based company's net loss for the fourth quarter narrowed to $8.9 million or $0.58 per share from $12.5 million or $0.82 per share in the year-ago quarter.

However, net sales for the quarter increased 9 percent to $548.9 million from $505.4 million in the prior-year period. The company noted that the incremental impact of acquisitions contributed about $16.7 million to the year-over-year net sales increase.

Gross profit margin for the quarter was 28.2 percent, down from 30.1 percent in the same period last year.

In the Residential Ventilation segment, net sales for the quarter rose 2 percent to $155.8 million on continued strength in the U.S. appliance and wholesale channels. Net sales in the Technology Solutions segment grew 16 percent to $117.0 million, primarily due to higher sales of security and access control products.

In the Display Mount Solutions segment, net sales increased 4 percent to $75.8 million as higher sales of Ergotron branded products were partly offset by lower sales to OEM customers on the company's planned exit from certain lower-margin OEM business.

Net sales in the Custom & Engineered Solution segment rose 13 percent to $120.1 million on increased demand primarily in the commercial office, data center, healthcare and manufacturing end markets.

In the Residential Heating and Cooling segment, net sales increased 9 percent to $80.2 million, driven by continuing strong demand for central air conditioners and heat pumps in both the replacement and new construction markets.

Looking ahead, Clarke said, "We remain cautiously optimistic about end-market conditions for full-year 2014. Although the recent industry statistics on housing starts, existing home sales and residential improvements have been somewhat soft, we believe the underlying conditions in the U.S. housing market remain sound."

NTK closed Tuesday's trading at $73.77, up $0.57 or 0.78 percent on a volume of 14,544 shares.