Nortek, Inc. (Nasdaq: NTK) beat analysts forecasts for both its Q4 (ended December 31, 2015) and annual earnings, with the company showing strength in its security segment but struggles in the A/V segment.
For 2015, net sales were $2.52 billion, down 0.8 percent from 2014. Net EBITDA was $267 million. For Q4, net sales decreased 0.9 percent to $631 million, from $636.8 million in the fourth quarter of 2014. Acquisitions contributed $10.2 million to fourth quarter net sales. Operating earnings were $28.1 million, compared with $29.1 million in the fourth quarter of 2014.
In Nortek’s Security & Control Solutions (SCS) segment, which includes 2Gig and its new Go!Control system, net sales increased 7.1 percent in Q4 2015 vs. 2014 due to “solid demand across channels for our security and home automation products,” according to its report.
The news was not as good for Core Brands. Net sales in the Audio, Video & Control Solutions (AVC) segments decreased 27.1 percent compared with the fourth quarter of 2014. The organic decrease was primarily driven by lower sales of commercial A/V products.
“2015 was an important year of investment and transition for Nortek, in which we set the stage for growth and improved performance in 2016 and beyond,” says president and CEO Michael Clark. “Despite the challenges we faced in the first nine months of the year including major restructuring logistics issues and destruction caused by a terminated sale process. The underlying business trends to the fourth quarter were positive.”
Clark adds that the company expects to build on its momentum in 2016 as it concludes its multi-year transformation and restructuring aimed to “transform Nortek into a true operating company, with shaping the structure of the company and how we manage it.”
Clark specifically cited the Go!Control GC3 system that began shipping last month as something the company is very excited about. He noted that there are now 3 million 2Gig panels installed worldwide and it has been updated with a new seven-inch touchscreen, sleek user interface, the ability to connect with Wi-Fi, Bluetooth and switch to radios.
“In A/V, we remain focused on returning the segment to grow and improve profitability,” says Clark. “After three consecutive quarters of adjusted EBITDA losses, in 2015 we are pleased to breakeven in the fourth quarter.”
He noted that the company’s new structure within Core Brands will enable them to better service customers moving forward.
In addition to the security and A/V groups, Nortek is a global diversified industrial company with brands in air management and other technology-driven solutions for residential and commercial applications.