Nortek announced financial results for the second quarter ended June 27, 2015. Net sales decreased 2% to $703.9 million, from $718.6 million in Q2 2014.
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Acquisitions contributed $27.3 million to net sales for the second quarter of 2015. Excluding acquisitions and the impact of foreign exchange translation, net sales decreased 4.2%.
GAAP operating earnings were $34.7 million, compared with an operating loss of $32.1 million in the second quarter of 2014. The second quarters of 2015 and 2014 include non-cash impairment charges of $1.2 million and $80.4 million, respectively.
Acquisitions contributed $400,000 to GAAP operating earnings in the second quarter of 2015.
Adjusted operating earnings* were $53.4 million, compared with $59.2 million in the second quarter of 2014. Adjusted operating margin was 7.6%, compared with 8.2% in the prior-year period.
Acquisitions contributed $600,000 to adjusted operating earnings in the second quarter of 2015.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $83.2 million, compared with $88.6 million in the second quarter of 2014. Adjusted EBITDA margin was 11.8%, compared with 12.3% in the prior-year period. Acquisitions contributed $3.1 million to adjusted EBITDA in the second quarter of 2015.
GAAP net loss was $2.3 million, or $0.14 loss per diluted share, compared with GAAP net loss of $46.2 million, or $2.97 loss per diluted share, in the second quarter of 2014.
In addition to the non-cash impairment charges noted above, GAAP net losses in the second quarters of 2015 and 2014 reflect loss from debt retirement charges of $14.8 million and $1.8 million, respectively.
Net cash used in operating activities was $25.6 million, compared with $7.9 million in the second quarter of 2014. Capital expenditures were $9.9 million, compared with $10.4 million in last year's second quarter.
Free cash flow, which is defined as net cash used in operating activities minus capital expenditures, was negative $35.5 million, compared with negative $18.3 million in the second quarter of 2014.
As of June 27, 2015, Nortek had $26.2 million of unrestricted cash and cash equivalents on its balance sheet, compared with $58.4 million on December 31, 2014.
As of June 27, 2015, Nortek had $129 million of borrowings outstanding under its ABL facility, including approximately $50 million used for the acquisition of Anthro Corporation.
Nortek had no borrowings outstanding under its ABL facility on December 31, 2014 and had $134.0 million of borrowings outstanding under its ABL facility on July 31, 2015. ■