NORTEK INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

__________

FORM 10-Q

__________

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 2, 2005

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

333-119902

(Commission File Number)

__________

NORTEK, INC.

(Exact name of registrant as specified in its charter)

__________

Delaware		05-0314991
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

50 Kennedy Plaza, Providence, RI		02903-2360
(Address of principal executive offices)		(Zip Code)

	(401) 751-1600
	(Registrant’s telephone number, including area code)

__________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]

The number of shares of Common Stock outstanding as of May 6, 2005 was 3,000.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NORTEK, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

(Dollar amounts in thousands, except common stock data)

	April 2,		December 31,
	2005		2004
Assets
Current Assets:
Cash and cash equivalents	$	74,749	$	94,955
Accounts receivable, less allowances
of $5,802 and $5,467		240,634		225,706
Inventories:
Raw materials		70,530		72,166
Work in process		23,532		24,249
Finished goods		127,491		109,134
		221,553		205,549

Prepaid expenses		7,656		8,596
Other current assets		24,339		26,126
Prepaid income taxes		17,145		34,663
Current portion of receivable from affiliate		20,208		17,220
Total current assets		606,284		612,815

Property and Equipment, at Cost:
Land		8,514		8,683
Buildings and improvements		71,908		75,476
Machinery and equipment		127,385		124,644
		207,807		208,803
Less accumulated depreciation		12,302		7,713
Total property and equipment, net		195,505		201,090

Other Assets:
Goodwill		1,295,846		1,295,105
Intangible assets, less accumulated amortization
of $12,740 and $8,436		105,927		110,715
Deferred debt expense		40,637		41,741
Long-term portion of receivable from affiliate		16,363		16,088
Restricted investments and marketable securities		6,962		8,605
Other assets		7,802		11,154
		1,473,537		1,483,408
	$	2,275,326	$	2,297,313

Liabilities and Stockholder’s Investment

Current Liabilities:
Notes payable and other short-term obligations	$	8,028	$	5,364
Current maturities of long-term debt		10,728		14,414
Accounts payable		157,341		137,343
Accrued expenses and taxes, net		141,189		171,591
Total current liabilities		317,286		328,712

Other Liabilities:
Deferred income taxes		17,184		32,737
Other		164,338		168,708
		181,522		201,445

Notes, Mortgage Notes and Obligations
Payable, Less Current Maturities		1,347,779		1,350,210

Stockholder’s Investment:
Common stock, $0.01 par value, authorized 3,000 shares;
3,000 issued and outstanding at April 2, 2005 and
December 31, 2004		---		---
Additional paid-in capital		413,923		410,581
Retained earnings (accumulated deficit)		8,000		(2,700	)
Accumulated other comprehensive income		6,816		9,065
Total stockholder's investment		428,739		416,946
Total Liabilities and Stockholder's Investment:	$	2,275,326	$	2,297,313

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

NORTEK, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

	For the three months ended
	Post-			Pre-
	Acquisition			Acquisition
	April 2, 2005			April 3, 2004
	(Amounts in thousands)

Net Sales	$	434,118		$	405,012

Costs and Expenses:
Cost of products sold		309,459			286,882
Selling, general and administrative expense		79,441			73,148
Amortization of intangible assets		4,333			3,309
		393,233			363,339
Operating earnings		40,885			41,673
Interest expense		(24,285	)		(25,559	)
Loss from debt retirement		---			(11,958	)
Investment income		400			944
Earnings from continuing operations
before provision for income taxes		17,000			5,100
Provision for income taxes		6,300			2,100
Earnings from continuing operations		10,700			3,000
Earnings from discontinued operations		---			68,100
Net earnings	$	10,700		$	71,100

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 three months ended
	Post-		Pre-
	Acquisition		Acquisition
	April 2, 2005		April 3, 2004
	(Amounts in thousands)

Cash Flows from operating activities:
Net earnings from continuing operations	$	10,700	$	3,000
Earnings from discontinued operations		---		68,100
Net earnings		10,700		71,100

Adjustments to reconcile net earnings
to net cash used in operating activities:
Depreciation and amortization expense, including
amortization of purchase price allocated to inventory		11,615		9,262
Non-cash interest expense, net		1,442		8,596
Loss from debt retirement		---		11,958
Gain on the sale of discontinued operations		---		(122,700	)
Gain on sale of fixed assets		(280