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EX-99 - FINANCIAL DATA - NORTEK INC | financialdata.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
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): December 2,
2009
Nortek,
Inc.
(Exact Name of
Registrant as Specified in Its Charter)
Delaware
(State or Other
Jurisdiction of Incorporation)
333-152934
|
05-0314991
|
(Commission
File Number)
|
(I.R.S.
Employer Identification No.)
|
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)
|
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[
] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
____________________________________________________________________________________________________________________________________________
Item
7.01
|
REGULATION
FD DISCLOSURE
|
On December 1,
2009, certain declarations (the “Declarations”) were filed in the United States
Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) in
support of the joint prepackaged plans of reorganization of Nortek, Inc.
(“Nortek”), its parent corporations and its subsidiary debtors (collectively,
the “Debtors”). The Declarations include information based on
Nortek’s projections of its estimated performance through December 31, 2014 that
were prepared in the second fiscal quarter of 2009 (the
“Forecast”). The Debtors’ Disclosure Statement Relating to the Joint
Prepackaged Plans of Reorganization of NTK Holdings, Inc., et. al, Under Chapter
11 of the Bankruptcy Code, which was previously filed as Exhibit 99.1 of a
Current Report on Form 8-K, dated September 18, 2009, included certain selected
financial data relating to Nortek’s estimates of its projected financial
performance through December 31, 2012. Certain selected financial
information from Nortek’s Projected Condensed Consolidated Statements of
Operations for the fiscal years ending December 31, 2013 and 2014 is attached as
Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by
reference.
The Declarations
also include the following information regarding Nortek’s estimates of the
Debtors’ projected performance through December 31, 2014:
·
|
The Forecast
estimates that revenues will increase from $1.9 billion in 2010 to $2.5
billion in 2014 (CAGR: +6.5%), driven by stabilization of the residential
marketplace and increased consumer discretionary spending.
|
·
|
In guidance
published in August 2009, Nortek previously projected earnings before
interest, taxes, depreciation, and amortization, excluding goodwill
impairment charges and certain other unusual income and expense items,
(“EBITDA”) which amounts
to an approximate range from $138.9 million to $148.9 million for
2009. Nortek currently expects that that EBITDA will be at the higher end
of this range for 2009 and begin increasing in 2010 to $158 million and
will eventually reach $250 million in 2014. The projected EBITDA figure
for 2014 would constitute a return to 2007 performance
levels. The Forecast expects that EBITDA margins will rise from
7.4% in 2009 to 10.1% in 2014.
|
·
|
The Forecast
estimates that gross margins will increase from 26.5% in 2009 to 28.0% in
2014. This projected increase is based on the leverage from fixed
expenses, partially offset by increased material expense.
|
·
|
The Forecast
estimates that capital expenditures will decrease from $25 million in 2008
to $16 million in 2009 and will rebound to $32 million in 2010 due to a
renewed shift toward capital projects, such as manufacturing automation
and new products. From 2011 to 2014, the Forecast expects relatively level
capital expenditure outlays ranging from $32 million to $37 million per
year.
|
·
|
The Forecast
estimates that net working capital as a percentage of net sales will
increase from 10.0% in 2009 to approximately 12.2% in 2014. This increase
is based on assumptions about segment-level receivables, inventory, and
payables. During the first half of 2009, the days sales outstanding in
accounts receivable were 51, and are expected to remain between 43 and 46
through December 31, 2014.
|
·
|
Nortek has
implemented an SG&A reduction program that management expects will
reduce annual expenditures by an amount between approximately $60 million
and $70 million in 2009 over 2008. Following these initiatives,
the Forecast estimates SG&A expenditures to grow approximately 3% to
5% per year. The Forecast estimates that SG&A expenses as a
percentage of net sales will decrease from 21.2% in 2009 to 19.6% in 2014.
This projected decrease is primarily based on the leverage from fixed
expenses, partially offset by moderate increases in discretionary
spending.
|
·
|
The Forecast
estimates that annual inventory turnover will decrease from 5.6x in 2009
to 5.0x in 2014. Days payables outstanding are expected to remain between
30 days and 32 days during that timeframe.
|
·
|
The Forecast
estimates an overall growth rate in revenues of 4.7% in 2010 over 2009,
driven by a turnaround in the demand for the Debtors’ residential-related
products, particularly in the Residential Ventilation Products (+9.6%),
Home Technology Products (+7.7%), and Residential HVAC (+6.8%) segments,
partially offset by a decline in the Commercial HVAC (-7.7%)
segment. The Forecast estimates overall sales growth of 9.0% in
2011, which is expected to result from improved market conditions
impacting Nortek’s Residential HVAC (+11.7%), Residential Ventilation
Products (+9.6%), Home Technology Products (+7.9%), and Commercial HVAC
(+5.7%) segments. Overall growth is projected to be stable for
2012 through 2014 at 5% to 6% per year.
|
The Forecast was
prepared based on the assumption that the Debtors will emerge from their chapter
11 cases by December 31, 2009. Although the Debtors are seeking to
emerge prior to December 31, 2009, there can be no assurance as to when the
Debtors will emerge from their chapter 11 cases, if at all. The
Forecast also assumes that the Debtors will conduct their operations
substantially similar to those businesses currently in operation.
The Forecast is
based on assumptions that are inherently uncertain and unpredictable. The
operating and financial information contained in this projected financial data
have been prepared by management and reflect management’s current estimates of
the Debtors’ future performance. The projections and assumptions have not been
reviewed or independently verified by any third party. The Forecast is based on
assumptions and events over which, in many cases, the Debtors will have only
partial or no control. The selection of assumptions underlying such projected
information require the exercise of judgment, and the projections are subject to
uncertainty due to the effects that economic, business, competitive,
legislative, political or other changes may have on future events. Changes in
the facts or circumstances underlying such assumptions could materially affect
the projected financial information set forth above. To the extent that assumed
events do not materialize, actual results may vary substantially from the
projected results. As a result, no assurance can be made that the Debtors will
achieve the operating or financial results set forth in the projected financial
information set forth above, nor can there be any assurance that results will
not vary, perhaps materially and/or adversely.
The information
furnished on this Current Report on Form 8-K, including the exhibits attached
hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to
the liabilities of that section, nor shall it be deemed incorporated by
reference into any other filing under the Securities Act of 1933, as amended, or
the Exchange Act, except as expressly set forth by specific reference in such a
filing.
Forward-Looking
Statements
This document
contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. When used in this discussion and
throughout this document, words, such as “intends”, “plans”, “estimates”,
“believes”, “anticipates” and “expects” or similar expressions are intended to
identify forward-looking statements. These statements are based on
our 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 the availability and
cost of certain raw materials, (including, among others, steel, copper,
packaging materials, plastics and aluminum) and purchased components, the level
of domestic and foreign construction and remodeling activity affecting
residential and commercial markets, interest rates, employment, inflation,
foreign currency fluctuations, consumer spending levels, exposure to foreign
economies, the rate of sales growth, price, product and warranty liability
claims, any amendments to the Plan, whether or not the Plan is confirmed by the
bankruptcy court, and whether or not NTK, Holdings, Nortek and their domestic
subsidiaries conclude their chapter 11 cases in the anticipated timeframe or at
all. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof. We undertake no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. All subsequent written and oral forward-looking
statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by these cautionary statements. Readers
are also urged to carefully review and consider the various disclosures made
herein, as well as the periodic reports on Forms 10-K, 10-Q and 8-K, previously
filed by NTK and Nortek with the Commission.
Item
9.01
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FINANCIAL
STATEMENTS AND EXHIBITS
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Exhibit
no.
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Description
|
|
99.1
|
Selected
Financial Information from Nortek, Inc.’s Projected Condensed Consolidated
Statements of Operations for the fiscal years ending December 31, 2013 and
2014.
|
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
NORTEK, INC.
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By:
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/s/ Edward J.
Cooney
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Name: Edward J. Cooney
Title: Vice
President and Treasurer
Date: December
2, 2009
INDEX
TO EXHIBITS
Exhibit
no.
|
Description
|
|
99.1
|
Selected
Financial Information from Nortek, Inc.’s Projected Condensed Consolidated
Statements of Operations for the fiscal years ending December 31, 2013 and
2014.
|