Guarantor Financial Statements | 9 Months Ended |
Sep. 28, 2013 |
Guarantor Financial Statements [Abstract] | ' |
Guarantor Financial Statements | ' |
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| Guarantor Financial Statements | | | | | | | | | | | | | | | | | | | |
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The Company's 10% Notes and 8.5% Notes are guaranteed by each of the Company's current and future domestic subsidiaries that guarantee the Company's obligations under its senior secured credit facilities (the “Guarantors”). The Guarantors are wholly-owned, either directly or indirectly, by the Company and jointly and severally guarantee the Company's obligations under the 10% Notes and 8.5% Notes. None of the Company's foreign subsidiaries guarantee the 10% Notes or 8.5% Notes. |
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Consolidating balance sheets related to Nortek, the Guarantors and non-Guarantor subsidiaries as of September 28, 2013 and December 31, 2012 and the related consolidating statements of operations, comprehensive income, and cash flows for the third quarter and nine month of 2013 and 2012 are reflected below in order to comply with the reporting requirements for guarantor subsidiaries. |
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Condensed Consolidating Balance Sheet as of September 28, 2013 |
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| | | | | | | | | | | | | | | | | | | | |
| | | | Guarantor | | Non-Guarantor | | | | Nortek |
| | Nortek | | Subsidiaries | | Subsidiaries | | Eliminations | | Consolidated |
| | (Dollar amounts in millions) |
ASSETS: |
Current Assets: | | | | | | | | | | |
Unrestricted cash and cash equivalents | | $ | 38.3 | | | $ | 17.5 | | | $ | 30.8 | | | $ | — | | | $ | 86.6 | |
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Restricted cash | | — | | | — | | | 0.2 | | | — | | | 0.2 | |
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Accounts receivable, less allowances | | — | | | 261 | | | 64.7 | | | — | | | 325.7 | |
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Intercompany receivables | | 1.7 | | | — | | | 52.8 | | | (54.5 | ) | | — | |
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Inventories, net | | — | | | 218.6 | | | 79.3 | | | (8.4 | ) | | 289.5 | |
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Prepaid expenses | | 2.9 | | | 10.9 | | | 5.6 | | | — | | | 19.4 | |
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Other current assets | | 0.4 | | | 6.8 | | | 11.1 | | | — | | | 18.3 | |
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Prepaid income taxes | | 12.5 | | | 16.5 | | | — | | | (1.6 | ) | | 27.4 | |
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Total current assets | | 55.8 | | | 531.3 | | | 244.5 | | | (64.5 | ) | | 767.1 | |
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Property and Equipment, at Cost: | | | | | | | | | | |
Total property and equipment, net | | 6.5 | | | 146.2 | | | 68 | | | — | | | 220.7 | |
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Other Long-term Assets: | | | | | | | | | | |
Investment in subsidiaries and long-term | | 1,221.70 | | | 403.5 | | | — | | | (1,625.2 | ) | | — | |
receivable from (to) subsidiaries |
Goodwill | | — | | | 361.2 | | | 15.7 | | | — | | | 376.9 | |
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Intangible assets, less accumulated amortization | | — | | | 639.7 | | | 32.9 | | | (10.6 | ) | | 662 | |
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Deferred tax asset | | 10.3 | | | — | | | — | | | (10.3 | ) | | — | |
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Other assets | | 21.1 | | | 16.2 | | | 0.8 | | | — | | | 38.1 | |
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Total other long-term assets | | 1,253.10 | | | 1,420.60 | | | 49.4 | | | (1,646.1 | ) | | 1,077.00 | |
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Total Assets | | $ | 1,315.40 | | | $ | 2,098.10 | | | $ | 361.9 | | | $ | (1,710.6 | ) | | $ | 2,064.80 | |
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LIABILITIES AND STOCKHOLDERS' INVESTMENT (DEFICIT): |
Current Liabilities: | | | | | | | | | | |
Short term bank obligations | | $ | — | | | $ | — | | | $ | 0.7 | | | $ | — | | | $ | 0.7 | |
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Current maturities of long-term debt | | 15.3 | | | 2.4 | | | — | | | — | | | 17.7 | |
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Accounts payable | | 2.7 | | | 122.8 | | | 107.2 | | | — | | | 232.7 | |
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Accrued expenses and taxes, net | | 51.4 | | | 156.4 | | | 45 | | | — | | | 252.8 | |
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Current deferred taxes | | — | | | — | | | 1.6 | | | (1.6 | ) | | — | |
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Intercompany payables | | — | | | 54.5 | | | — | | | (54.5 | ) | | — | |
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Total current liabilities | | 69.4 | | | 336.1 | | | 154.5 | | | (56.1 | ) | | 503.9 | |
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Other Liabilities: | | | | | | | | | | |
Deferred income taxes | | — | | | 159.8 | | | 8.7 | | | (13.5 | ) | | 155 | |
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Other long-term liabilities | | 45.7 | | | 123.8 | | | 24.8 | | | — | | | 194.3 | |
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Long-term intercompany payables | | — | | | — | | | 44.9 | | | (44.9 | ) | | — | |
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| | 45.7 | | | 283.6 | | | 78.4 | | | (58.4 | ) | | 349.3 | |
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Notes, Mortgage Notes and Obligations | | 1,098.70 | | | 11.2 | | | 0.1 | | | — | | | 1,110.00 | |
Payable, Less Current Maturities |
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Stockholders' investment (deficit) | | 101.6 | | | 1,467.20 | | | 128.9 | | | (1,596.1 | ) | | 101.6 | |
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Total Liabilities and Stockholders' | | $ | 1,315.40 | | | $ | 2,098.10 | | | $ | 361.9 | | | $ | (1,710.6 | ) | | $ | 2,064.80 | |
Investment (Deficit) |
Condensed Consolidating Balance Sheet as of December 31, 2012 |
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| | | | | | | | | | | | | | | | | | | | |
| | | | Guarantor | | Non-Guarantor | | | | Nortek |
| | Nortek | | Subsidiaries | | Subsidiaries | | Eliminations | | Consolidated |
| | (Dollar amounts in millions) |
ASSETS: |
Current Assets: | | | | | | | | | | |
Unrestricted cash and cash equivalents | | $ | 94.9 | | | $ | 13.1 | | | $ | 36.7 | | | $ | — | | | $ | 144.7 | |
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Restricted cash | | — | | | — | | | 0.2 | | | — | | | 0.2 | |
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Accounts receivable, less allowances | | — | | | 191.7 | | | 65.7 | | | — | | | 257.4 | |
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Intercompany receivables | | 1 | | | — | | | 42.3 | | | (43.3 | ) | | — | |
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Inventories, net | | — | | | 192.4 | | | 71.6 | | | (5.6 | ) | | 258.4 | |
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Prepaid expenses | | 1.2 | | | 8.7 | | | 4.5 | | | — | | | 14.4 | |
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Other current assets | | — | | | 10.7 | | | 10.4 | | | (1.1 | ) | | 20 | |
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Prepaid income taxes | | 18.3 | | | 12.6 | | | — | | | (1.6 | ) | | 29.3 | |
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Total current assets | | 115.4 | | | 429.2 | | | 231.4 | | | (51.6 | ) | | 724.4 | |
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Property and Equipment, at Cost: | | | | | | | | | | |
Total property and equipment, net | | 3 | | | 128.7 | | | 67.8 | | | — | | | 199.5 | |
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Other Long-term Assets: | | | | | | | | | | |
Investment in subsidiaries and long-term | | 1,107.80 | | | 321.2 | | | — | | | (1,429.0 | ) | | — | |
receivable from (to) subsidiaries |
Goodwill | | — | | | 292.7 | | | 14.9 | | | — | | | 307.6 | |
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Intangible assets, less accumulated amortization | | — | | | 591.6 | | | 34.5 | | | (11.2 | ) | | 614.9 | |
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Deferred tax asset | | 10.9 | | | — | | | — | | | (10.9 | ) | | — | |
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Other assets | | 25.4 | | | 15.7 | | | 0.6 | | | — | | | 41.7 | |
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Total other long-term assets | | 1,144.10 | | | 1,221.20 | | | 50 | | | (1,451.1 | ) | | 964.2 | |
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Total Assets | | $ | 1,262.50 | | | $ | 1,779.10 | | | $ | 349.2 | | | $ | (1,502.7 | ) | | $ | 1,888.10 | |
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LIABILITIES AND STOCKHOLDERS' INVESTMENT (DEFICIT): |
Current Liabilities: | | | | | | | | | | |
Short term bank obligations | | $ | — | | | $ | — | | | $ | 0.7 | | | $ | — | | | $ | 0.7 | |
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Current maturities of long-term debt | | 0.3 | | | 2.1 | | | — | | | — | | | 2.4 | |
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Accounts payable | | 4.1 | | | 76.7 | | | 93.6 | | | — | | | 174.4 | |
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Accrued expenses and taxes, net | | 31.1 | | | 119.4 | | | 48.8 | | | (0.4 | ) | | 198.9 | |
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Current deferred taxes | | — | | | — | | | 1.6 | | | (1.6 | ) | | — | |
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Intercompany payables | | — | | | 43.3 | | | — | | | (43.3 | ) | | — | |
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Total current liabilities | | 35.5 | | | 241.5 | | | 144.7 | | | (45.3 | ) | | 376.4 | |
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Other Liabilities: | | | | | | | | | | |
Deferred income taxes | | — | | | 137.3 | | | 8.7 | | | (13.3 | ) | | 132.7 | |
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Other long-term liabilities | | 47.7 | | | 110.3 | | | 28.9 | | | — | | | 186.9 | |
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Long-term intercompany payables | | — | | | — | | | 44 | | | (44.0 | ) | | — | |
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| | 47.7 | | | 247.6 | | | 81.6 | | | (57.3 | ) | | 319.6 | |
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Notes, Mortgage Notes and Obligations | | 1,085.10 | | | 12.8 | | | — | | | — | | | 1,097.90 | |
Payable, Less Current Maturities |
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Stockholders' investment (deficit) | | 94.2 | | | 1,277.20 | | | 122.9 | | | (1,400.1 | ) | | 94.2 | |
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Total Liabilities and Stockholders' | | $ | 1,262.50 | | | $ | 1,779.10 | | | $ | 349.2 | | | $ | (1,502.7 | ) | | $ | 1,888.10 | |
Investment (Deficit) |
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) |
For the third quarter ended September 28, 2013 |
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| | | | Guarantor | | Non-Guarantor | | | | Nortek |
| | Nortek | | Subsidiaries | | Subsidiaries | | Eliminations | | Consolidated |
| | (Dollar amounts in millions) |
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Net Sales | | $ | — | | | $ | 510.6 | | | $ | 185.8 | | | $ | (107.2 | ) | | $ | 589.2 | |
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Cost of products sold | | — | | | 365.2 | | | 156.2 | | | (107.3 | ) | | 414.1 | |
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Gross profit | | — | | | 145.4 | | | 29.6 | | | 0.1 | | | 175.1 | |
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Selling, general and administrative expense, net | | 13.1 | | | 94.1 | | | 22.2 | | | — | | | 129.4 | |
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Amortization of intangible assets | | — | | | 12.7 | | | 0.7 | | | (0.2 | ) | | 13.2 | |
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Operating (loss) earnings | | (13.1 | ) | | 38.6 | | | 6.7 | | | 0.3 | | | 32.5 | |
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Interest expense | | (24.2 | ) | | (0.6 | ) | | — | | | — | | | (24.8 | ) |
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Investment income | | — | | | — | | | — | | | — | | | — | |
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(Loss) income before charges and allocations to | | (37.3 | ) | | 38 | | | 6.7 | | | 0.3 | | | 7.7 | |
subsidiaries and equity in subsidiaries' |
earnings (loss) before income taxes |
Charges and allocations to subsidiaries and equity | | 45 | | | (16.4 | ) | | 0.3 | | | (28.9 | ) | | — | |
in subsidiaries' earnings (loss) before income |
taxes |
Earnings (loss) before provision (benefit) for | | 7.7 | | | 21.6 | | | 7 | | | (28.6 | ) | | 7.7 | |
income taxes |
Provision (benefit) for income taxes | | 3.5 | | | 7.4 | | | 3.8 | | | (11.2 | ) | | 3.5 | |
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Net earnings (loss) | | $ | 4.2 | | | $ | 14.2 | | | $ | 3.2 | | | $ | (17.4 | ) | | $ | 4.2 | |
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Comprehensive income (loss) | | $ | 7 | | | $ | 14.2 | | | $ | 6 | | | $ | (20.2 | ) | | $ | 7 | |
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Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) |
For the third quarter ended September 29, 2012 |
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| | | | Guarantor | | Non-Guarantor | | | | Nortek |
| | Nortek | | Subsidiaries | | Subsidiaries | | Eliminations | | Consolidated |
| | (Dollar amounts in millions) |
| | | | | | | | | | |
Net Sales | | $ | — | | | $ | 461.9 | | | $ | 178.6 | | | $ | (83.1 | ) | | $ | 557.4 | |
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Cost of products sold | | — | | | 328.9 | | | 152.2 | | | (82.1 | ) | | 399 | |
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Gross profit | | — | | | 133 | | | 26.4 | | | (1.0 | ) | | 158.4 | |
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Selling, general and administrative expense, net | | 11.5 | | | 81.8 | | | 20.3 | | | — | | | 113.6 | |
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Amortization of intangible assets | | — | | | 10.5 | | | 0.7 | | | (0.2 | ) | | 11 | |
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Operating (loss) earnings | | (11.5 | ) | | 40.7 | | | 5.4 | | | (0.8 | ) | | 33.8 | |
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Interest expense | | (23.1 | ) | | (0.5 | ) | | (0.1 | ) | | — | | | (23.7 | ) |
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Investment income | | — | | | — | | | 0.1 | | | — | | | 0.1 | |
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(Loss) income before charges and allocations to | | (34.6 | ) | | 40.2 | | | 5.4 | | | (0.8 | ) | | 10.2 | |
subsidiaries and equity in subsidiaries' |
earnings (loss) before income taxes |
Charges and allocations to subsidiaries and equity | | 44.8 | | | (12.8 | ) | | 11.8 | | | (43.8 | ) | | — | |
in subsidiaries' earnings (loss) before income |
taxes |
Earnings (loss) before provision (benefit) for | | 10.2 | | | 27.4 | | | 17.2 | | | (44.6 | ) | | 10.2 | |
income taxes |
Provision (benefit) for income taxes | | 5.5 | | | 7.7 | | | 4.1 | | | (11.8 | ) | | 5.5 | |
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Net earnings (loss) | | $ | 4.7 | | | $ | 19.7 | | | $ | 13.1 | | | $ | (32.8 | ) | | $ | 4.7 | |
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Comprehensive income (loss) | | $ | 7 | | | $ | 19.9 | | | $ | 15.2 | | | $ | (35.1 | ) | | $ | 7 | |
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Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income |
For the first nine months ended September 28, 2013 |
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| | | | Guarantor | | Non-Guarantor | | | | Nortek |
| | Nortek | | Subsidiaries | | Subsidiaries | | Eliminations | | Consolidated |
| | (Dollar amounts in millions) |
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Net Sales | | $ | — | | | $ | 1,489.30 | | | $ | 550.7 | | | $ | (301.0 | ) | | $ | 1,739.00 | |
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Cost of products sold | | — | | | 1,067.40 | | | 464.8 | | | (298.9 | ) | | 1,233.30 | |
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Gross profit | | — | | | 421.9 | | | 85.9 | | | (2.1 | ) | | 505.7 | |
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Selling, general and administrative expense, net | | 46.1 | | | 275.5 | | | 68.5 | | | — | | | 390.1 | |
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Amortization of intangible assets | | — | | | 36.6 | | | 2.1 | | | (0.6 | ) | | 38.1 | |
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Operating (loss) earnings | | (46.1 | ) | | 109.8 | | | 15.3 | | | (1.5 | ) | | 77.5 | |
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Interest expense | | (72.2 | ) | | (1.9 | ) | | (0.1 | ) | | — | | | (74.2 | ) |
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Investment income | | — | | | — | | | 0.1 | | | — | | | 0.1 | |
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(Loss) income before charges and allocations to | | (118.3 | ) | | 107.9 | | | 15.3 | | | (1.5 | ) | | 3.4 | |
subsidiaries and equity in subsidiaries' |
earnings (loss) before income taxes |
Charges and allocations to subsidiaries and equity | | 121.7 | | | (51.3 | ) | | 0.8 | | | (71.2 | ) | | — | |
in subsidiaries' earnings (loss) before income |
taxes |
Earnings (loss) before provision (benefit) for | | 3.4 | | | 56.6 | | | 16.1 | | | (72.7 | ) | | 3.4 | |
income taxes |
Provision (benefit) for income taxes | | 2.8 | | | 15.6 | | | 7.8 | | | (23.4 | ) | | 2.8 | |
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Net earnings (loss) | | $ | 0.6 | | | $ | 41 | | | $ | 8.3 | | | $ | (49.3 | ) | | $ | 0.6 | |
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Comprehensive (loss) income | | $ | (1.2 | ) | | $ | 41.1 | | | $ | 6 | | | $ | (47.1 | ) | | $ | (1.2 | ) |
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Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) |
For the first nine months ended September 29, 2012 |
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| | | | Guarantor | | Non-Guarantor | | | | Nortek |
| | Nortek | | Subsidiaries | | Subsidiaries | | Eliminations | | Consolidated |
| | (Dollar amounts in millions) |
| | | | | | | | | | |
Net Sales | | $ | — | | | $ | 1,392.10 | | | $ | 543 | | | $ | (239.2 | ) | | $ | 1,695.90 | |
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Cost of products sold | | — | | | 985.9 | | | 458 | | | (236.2 | ) | | 1,207.70 | |
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Gross profit | | — | | | 406.2 | | | 85 | | | (3.0 | ) | | 488.2 | |
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Selling, general and administrative expense, net | | 29.4 | | | 250.6 | | | 62.8 | | | — | | | 342.8 | |
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Amortization of intangible assets | | — | | | 31.1 | | | 2.1 | | | (0.2 | ) | | 33 | |
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Operating (loss) earnings | | (29.4 | ) | | 124.5 | | | 20.1 | | | (2.8 | ) | | 112.4 | |
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Interest expense | | (70.1 | ) | | (1.7 | ) | | (0.4 | ) | | — | | | (72.2 | ) |
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Investment income | | — | | | — | | | 0.2 | | | — | | | 0.2 | |
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(Loss) income before charges and allocations to | | (99.5 | ) | | 122.8 | | | 19.9 | | | (2.8 | ) | | 40.4 | |
subsidiaries and equity in subsidiaries' |
earnings (loss) before income taxes |
Charges and allocations to subsidiaries and equity | | 139.9 | | | (42.1 | ) | | 12 | | | (109.8 | ) | | — | |
in subsidiaries' earnings (loss) before income |
taxes |
Earnings (loss) before provision (benefit) for | | 40.4 | | | 80.7 | | | 31.9 | | | (112.6 | ) | | 40.4 | |
income taxes |
Provision (benefit) for income taxes | | 18.4 | | | 28.3 | | | 10.8 | | | (39.1 | ) | | 18.4 | |
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Net earnings (loss) | | $ | 22 | | | $ | 52.4 | | | $ | 21.1 | | | $ | (73.5 | ) | | $ | 22 | |
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Comprehensive income (loss) | | $ | 23.7 | | | $ | 52.6 | | | $ | 22.7 | | | $ | (75.3 | ) | | $ | 23.7 | |
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Condensed Consolidating Cash Flow Statement |
For the first nine months ended September 28, 2013 |
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| | | | | | | | | | | | | | | | | | | | |
| | | | Guarantor | | Non-Guarantor | | Nortek | | | | |
| | Nortek | | Subsidiaries | | Subsidiaries | | Consolidated | | | | |
| | (Dollar amounts in millions) | | | | |
| | | | | | | | | | | | |
Cash Flows from operating activities: | | | | | | | | | | | | |
Net cash (used in) provided by operating activities | | $ | (100.3 | ) | | $ | 194 | | | $ | 2.3 | | | $ | 96 | | | | | |
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Cash Flows from investing activities: | | | | | | | | | | | | |
Capital expenditures | | (4.3 | ) | | (20.6 | ) | | (8.0 | ) | | (32.9 | ) | | | | |
Net cash paid for businesses acquired | | (145.5 | ) | | — | | | (0.9 | ) | | (146.4 | ) | | | | |
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Proceeds from the sale of property and equipment | | — | | | 0.1 | | | — | | | 0.1 | | | | | |
| | | |
Change in restricted cash and marketable securities | | 0.1 | | | 0.1 | | | — | | | 0.2 | | | | | |
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Other, net | | — | | | (1.6 | ) | | 0.6 | | | (1.0 | ) | | | | |
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Net cash used in investing activities | | (149.7 | ) | | (22.0 | ) | | (8.3 | ) | | (180.0 | ) | | | | |
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Cash Flows from financing activities: | | | | | | | | | | | | |
Proceeds from borrowings | | 135 | | | — | | | 2.3 | | | 137.3 | | | | | |
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Payment of borrowings | | (105.3 | ) | | (1.9 | ) | | (2.2 | ) | | (109.4 | ) | | | | |
Net use from equity transactions | | (1.8 | ) | | — | | | — | | | (1.8 | ) | | | | |
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Long-term intercompany advances and loans | | 165.7 | | | (165.7 | ) | | — | | | — | | | | | |
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Other, net | | (0.2 | ) | | — | | | — | | | (0.2 | ) | | | | |
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Net cash provided by (used in) financing activities | | 193.4 | | | (167.6 | ) | | 0.1 | | | 25.9 | | | | | |
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Net change in unrestricted cash and cash equivalents | | (56.6 | ) | | 4.4 | | | (5.9 | ) | | (58.1 | ) | | | | |
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Unrestricted cash and cash equivalents at the | | 94.9 | | | 13.1 | | | 36.7 | | | 144.7 | | | | | |
beginning of the period | | | | |
Unrestricted cash and cash equivalents at the | | $ | 38.3 | | | $ | 17.5 | | | $ | 30.8 | | | $ | 86.6 | | | | | |
end of the period | | | | |
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Condensed Consolidating Cash Flow Statement |
For the first nine months ended September 29, 2012 |
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| | | | Guarantor | | Non-Guarantor | | Nortek | | | | |
| | Nortek | | Subsidiaries | | Subsidiaries | | Consolidated | | | | |
| | (Dollar amounts in millions) | | | | |
| | | | | | | | | | | | |
Cash Flows from operating activities: | | | | | | | | | | | | |
Net cash (used in) provided by operating activities | | $ | (86.2 | ) | | $ | 201.6 | | | $ | 22.5 | | | $ | 137.9 | | | | | |
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Cash Flows from investing activities: | | | | | | | | | | | | |
Capital expenditures | | (0.7 | ) | | (11.5 | ) | | (3.9 | ) | | (16.1 | ) | | | | |
Net cash paid for businesses acquired | | (2.6 | ) | | — | | | — | | | (2.6 | ) | | | | |
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Investment in joint venture | | — | | | 6.5 | | | (6.5 | ) | | — | | | | | |
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Proceeds from the sale of property and equipment | | — | | | 2.4 | | | 0.1 | | | 2.5 | | | | | |
| | | |
Change in restricted cash and marketable securities | | 0.1 | | | 0.1 | | | — | | | 0.2 | | | | | |
| | | |
Other, net | | 0.1 | | | 0.2 | | | 0.2 | | | 0.5 | | | | | |
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Net cash used in investing activities | | (3.1 | ) | | (2.3 | ) | | (10.1 | ) | | (15.5 | ) | | | | |
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Cash Flows from financing activities: | | | | | | | | | | | | |
Proceeds from borrowings | | 30 | | | — | | | 3.5 | | | 33.5 | | | | | |
| | | |
Payment of borrowings | | (57.6 | ) | | (1.8 | ) | | (22.6 | ) | | (82.0 | ) | | | | |
Fees paid in connection with debt facilities | | (1.3 | ) | | — | | | — | | | (1.3 | ) | | | | |
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Long-term intercompany advances and loans | | 186.1 | | | (194.4 | ) | | 8.3 | | | — | | | | | |
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Other, net | | (0.1 | ) | | — | | | — | | | (0.1 | ) | | | | |
| | | |
Net cash provided by (used in) financing activities | | 157.1 | | | (196.2 | ) | | (10.8 | ) | | (49.9 | ) | | | | |
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Net change in unrestricted cash and cash equivalents | | 67.8 | | | 3.1 | | | 1.6 | | | 72.5 | | | | | |
| | | |
Unrestricted cash and cash equivalents at the | | 17.8 | | | 9.3 | | | 31.1 | | | 58.2 | | | | | |
beginning of the period | | | | |
Unrestricted cash and cash equivalents at the | | $ | 85.6 | | | $ | 12.4 | | | $ | 32.7 | | | $ | 130.7 | | | | | |
end of the period | | | | |
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