**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      DC 20549**

**__________**

**FORM      10-Q**

**__________**

**OR**

**NORTEK,      INC.**

|  **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) |

**PART      I - FINANCIAL INFORMATION**

**ITEM      1. FINANCIAL STATEMENTS**

**NORTEK,      INC. AND SUBSIDIARIES**

**UNAUDITED      CONDENSED CONSOLIDATED BALANCE SHEET**

*(Dollar      amounts in thousands, except share data)*

|                                                                                                                         |   | **October                  1,** |      | **December                  31,** |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|-----------------------------------|--------|
|                                                                                                                         |   | **2005**                        |      | **2004**                          |   |
| **Assets**                                                                                                                   |   |                            |      |                              |   |
| **Current                  Assets:**                                                                                         |   |                            |      |                              |   |
| Unrestricted                  cash and cash equivalents                                                                      |   | $                               | 46,989    |                              | $      | 94,955 |   |
| Restricted                  cash and cash equivalents                                                                        |   |                            | 2,271     |                              |   | --- |   |
| Accounts                    receivable, less allowances of $6,941 and $5,467                                                 |   |                            | 296,617   |                              |   | 225,706 |   |
| Inventories:                                                                                                                 |   |                            |      |                              |   |   |   |
| Raw                  materials                                                                                               |   |                            | 77,067    |                              |   | 72,166 |   |
| Work                  in process                                                                                             |   |                            | 22,780    |                              |   | 24,249 |   |
| Finished                  goods                                                                                              |   |                            | 125,573   |                              |   | 109,134 |   |
|                                                                                                                         |   |                            | 225,420   |                              |   | 205,549 |   |
|                                                                                                                         |   |                            |      |                              |   |   |   |
| Prepaid                  expenses                                                                                            |   |                            | 11,201    |                              |   | 8,596 |   |
| Other                  current assets                                                                                        |   |                            | 27,283    |                              |   | 26,126 |   |
| Prepaid                  income taxes                                                                                        |   |                            | 29,794    |                              |   | 34,663 |   |
| Current                  portion of receivable from affiliate                                                                |   |                            | ---       |                              |   | 17,220 |   |
|                     Total current assets                                                                           |   |                            | 639,575   |                              |   | 612,815 |   |
|                                                                                                                         |   |                            |      |                              |   |   |   |
| **Property                  and Equipment, at Cost:**                                                                        |   |                            |      |                              |   |   |   |
| Land                                                                                                                         |   |                            | 8,780     |                              |   | 8,683 |   |
| Buildings                  and improvements                                                                                  |   |                            | 72,097    |                              |   | 75,476 |   |
| Machinery                  and equipment                                                                                     |   |                            | 140,522   |                              |   | 124,644 |   |
|                                                                                                                         |   |                            | 221,399   |                              |   | 208,803 |   |
| Less                  accumulated depreciation                                                                               |   |                            | 24,338    |                              |   | 7,713 |   |
|                     Total property and equipment, net                                                              |   |                            | 197,061   |                              |   | 201,090 |   |
|                                                                                                                         |   |                            |      |                              |   |   |   |
| **Other                  Assets:**                                                                                           |   |                            |      |                              |   |   |   |
| Goodwill                                                                                                                     |   |                            | 1,383,848 |                              |   | 1,295,105 |   |
| Intangible                    assets, less accumulated amortization of $21,507 and                    $8,436                 |   |                            | 99,312    |                              |   | 110,715 |   |
| Deferred                  debt expense                                                                                       |   |                            | 37,930    |                              |   | 41,741 |   |
| Long-term                  portion of receivable from affiliate                                                              |   |                            | 16,893    |                              |   | 16,088 |   |
| Restricted                  investments and marketable securities                                                            |   |                            | 3,808     |                              |   | 8,605 |   |
| Other                  assets                                                                                                |   |                            | 8,569     |                              |   | 11,154 |   |
|                                                                                                                         |   |                            | 1,550,360 |                              |   | 1,483,408 |   |
|                                                                                                                         |   | $                               | 2,386,996 |                              | $      | 2,297,313 |   |
|                                                                                                                         |   |                            |      |                              |   |   |   |
| **Liabilities                  and Stockholder’s Investment**                                                          |   |                            |      |                              |   |   |   |
|                                                                                                                         |   |                            |      |                              |   |   |   |
| **Current                  Liabilities:**                                                                                    |   |                            |      |                              |   |   |   |
| Notes                  payable and other short-term obligations                                                              |   | $                               | 6,894     |                              | $      | 5,364 |   |
| Current                  maturities of long-term debt                                                                        |   |                            | 11,291    |                              |   | 14,414 |   |
| Accounts                  payable                                                                                            |   |                            | 171,229   |                              |   | 137,343 |   |
| Accrued                  expenses and taxes, net                                                                             |   |                            | 172,311   |                              |   | 171,591 |   |
|                     Total current liabilities                                                                      |   |                            | 361,725   |                              |   | 328,712 |   |
|                                                                                                                         |   |                            |      |                              |   |   |   |
| **Other                  Liabilities:**                                                                                      |   |                            |      |                              |   |   |   |
| Deferred                  income taxes                                                                                       |   |                            | 27,647    |                              |   | 32,737 |   |
| Other                                                                                                                        |   |                            | 163,380   |                              |   | 168,708 |   |
|                                                                                                                         |   |                            | 191,027   |                              |   | 201,445 |   |
|                                                                                                                         |   |                            |      |                              |   |   |   |
| **Notes,                    Mortgage Notes and Obligations Payable, Less Current                    Maturities**        |   |                            | 1,357,885 |                              |   | 1,350,210 |   |
|                                                                                                                         |   |                            |      |                              |   |   |   |
| **Stockholder’s                  Investment:**                                                                         |   |                            |      |                              |   |   |   |
|  Common                  stock, $0.01 par value, authorized 3,000 shares; 3,000 issued and                  outstanding |   |                            |      |                              |   |   |   |
|                     at October 1, 2005 and December 31, 2004                                                       |   |                            | ---       |                              |   | --- |   |
| Additional                  paid-in capital                                                                                  |   |                            | 414,619   |                              |   | 410,581 |   |
| Retained                  earnings (accumulated deficit)                                                                     |   |                            | 54,300    |                              |   | (2,700 | ) |
| Accumulated                  other comprehensive income                                                                      |   |                            | 7,440     |                              |   | 9,065 |   |
|    Total                  stockholder's investment                                                            |   |                            | 476,359   |                              |   | 416,946 |   |
| **Total                  Liabilities and Stockholder's Investment:**                                                         |   | $                               | 2,386,996 |                              | $      | 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 Periods**      |    |
|------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|---------|
|                                                                                                                         |   | **Post-Acquisition**                      |    | **Pre-Acquisition** |   |
|                                                                                                                         |   | **July                  3, 2005 -**       |    | **Aug.                  28, 2004 -** |   | **July                  4, 2004 -** |   |
|                                                                                                                         |   | **Oct.                  1, 2005**         |    | **Oct.                  2, 2004** |   | **Aug.                  27, 2004** |   |
|                                                                                                                         |   | *(Amounts                  in thousands)* |    |
|                                                                                                                         |   |                                      |    |   |   |   |   |
| **Net                  Sales**                                                                                          |   | $                                         | 522,866 |   | $ | 161,028 |   | $ | 266,836 |   |
|                                                                                                                         |   |                                      |    |   |   |   |   |   |   |   |
| **Costs                  and Expenses:**                                                                                     |   |                                      |    |   |   |   |   |   |   |   |
| Cost                  of products sold                                                                                       |   |                                      | 361,268 |   |   | 115,892 |   |   | 191,073 |   |
| Selling,                  general and administrative expense                                                                 |   |                                      | 89,627  |   |   | 28,267 |   |   | 46,014 |   |
| Amortization                  of intangible assets                                                                           |   |                                      | 4,391   |   |   | 1,404 |   |   | 2,020 |   |
| Expenses                  and charges arising from the Acquisition                                                           |   |                                      | ---     |   |   | --- |   |   | 83,700 |   |
|                                                                                                                         |   |                                      | 455,286 |   |   | 145,563 |   |   | 322,807 |   |
| Operating                  earnings (loss)                                                                                   |   |                                      | 67,580  |   |   | 15,465 |   |   | (55,971 | ) |
| Interest                  expense                                                                                            |   |                                      | (26,544 | ) |   | (16,197 | ) |   | (12,092 | ) |
| Loss                  from debt retirement                                                                                   |   |                                      | ---     |   |   | --- |   |   | (118,778 | ) |
| Investment                  income                                                                                           |   |                                      | 264     |   |   | 32 |   |   | 241 |   |
| Earnings                    (loss) from continuing operations before                    provision (benefit) for income taxes |   |                                      | 41,300  |   |   | (700 | ) |   | (186,600 | ) |
| Provision                  (benefit) for income taxes                                                                        |   |                                      | 16,300  |   |   | (300 | ) |   | (55,200 | ) |
| **Earnings                  (loss) from continuing operations**                                                         |   |                                      | 25,000  |   |   | (400 | ) |   | (131,400 | ) |
| **Earnings                  from discontinued operations**                                                              |   |                                      | ---     |   |   | --- |   |   | 500 |   |
| **Net                  earnings (loss)**                                                                                     |   | $                                         | 25,000  |   | $ | (400 | ) | $ | (130,900 | ) |

*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 Periods**      |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|-----------|
|                                                                                                                                            |   | **Post-Acquisition**                      |      | **Pre-Acquisition** |   |
|                                                                                                                                            |   | **Jan.                  1, 2005 -**       |      | **Aug.                  28, 2004 -** |   | **Jan.                  1, 2004 -** |   |
|                                                                                                                                            |   | **Oct.                  1, 2005**         |      | **Oct.                  2, 2004** |   | **Aug.                  27, 2004** |   |
|                                                                                                                                            |   | *(Amounts                  in thousands)* |      |
|                                                                                                                                            |   |                                      |      |   |   |   |   |
| **Net                  Sales**                                                                                                             |   | $                                         | 1,455,844 |   | $ | 161,028 |   | $ | 1,117,860 |   |
|                                                                                                                                            |   |                                      |      |   |   |   |   |   |   |   |
| **Costs                  and Expenses:**                                                                                                        |   |                                      |      |   |   |   |   |   |   |   |
| Cost                  of products sold                                                                                                          |   |                                      | 1,021,133 |   |   | 115,892 |   |   | 792,759 |   |
| Selling,                  general and administrative expense                                                                                    |   |                                      | 254,055   |   |   | 28,267 |   |   | 199,943 |   |
| Amortization                  of intangible assets                                                                                              |   |                                      | 13,109    |   |   | 1,404 |   |   | 8,869 |   |
| Expenses                  and charges arising from the Acquisition                                                                              |   |                                      | ---       |   |   | --- |   |   | 83,700 |   |
|                                                                                                                                            |   |                                      | 1,288,297 |   |   | 145,563 |   |   | 1,085,271 |   |
| Operating                  earnings                                                                                                             |   |                                      | 167,547   |   |   | 15,465 |   |   | 32,589 |   |
| Interest                  expense                                                                                                               |   |                                      | (75,973   | ) |   | (16,197 | ) |   | (56,073 | ) |
| Loss                  from debt retirement                                                                                                      |   |                                      | ---       |   |   | --- |   |   | (130,736 | ) |
| Investment                  income                                                                                                              |   |                                      | 1,026     |   |   | 32 |   |   | 1,520 |   |
| Earnings                    (loss) from continuing operations before provision (benefit)                    for income                    taxes |   |                                      | 92,600    |   |   | (700 | ) |   | (152,700 | ) |
| Provision                  (benefit) for income taxes                                                                                           |   |                                      | 35,600    |   |   | (300 | ) |   | (41,400 | ) |
| **Earnings                  (loss) from continuing operations**                                                                            |   |                                      | 57,000    |   |   | (400 | ) |   | (111,300 | ) |
| **Earnings                  from discontinued operations**                                                                                 |   |                                      | ---       |   |   | --- |   |   | 67,400 |   |
| **Net                  earnings (loss)**                                                                                                        |   | $                                         | 57,000    |   | $ | (400 | ) | $ | (43,900 | ) |

*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 Periods**      |     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|----------|
|                                                                                                                                                            |   | **Post-Acquisition**                      |     | **Pre-Acquisition** |   |
|                                                                                                                                                            |   | **Jan.                  1, 2005 -**       |     | **Aug.                  28, 2004 -** |   | **Jan.                  1, 2004 -** |   |
|                                                                                                                                                            |   | **Oct.                  1, 2005**         |     | **Oct.                  2, 2004** |   | **Aug.                  27, 2004** |   |
|                                                                                                                                                            |   | *(Amounts                  in thousands)* |     |
|                                                                                                                                                            |   |                                      |     |   |   |   |   |
| **Cash                  Flows from operating activities:**                                                                                                      |   |                                      |     |   |   |   |   |
| Net                  earnings (loss) from continuing operations                                                                                                 |   | $                                         | 57,000   |   | $ | (400 | ) | $ | (111,300 | ) |
| Earnings                  from discontinued operations                                                                                                          |   |                                      | ---      |   |   | --- |   |   | 67,400 |   |
| Net                  earnings (loss)                                                                                                                            |   |                                      | 57,000   |   |   | (400 | ) |   | (43,900 | ) |
|                                                                                                                                                            |   |                                      |     |   |   |   |   |   |   |   |
| **Adjustments                    to reconcile net earnings (loss) to                    net cash provided by operating activities:**                            |   |                                      |     |   |   |   |   |   |   |   |
| Depreciation                    and amortization expense, including amortization of purchase                    price                    allocated to inventory |   |                                      | 34,343   |   |   | 6,307 |   |   | 25,823 |   |
| Non-cash                  interest expense, net                                                                                                                 |   |                                      | 4,089    |   |   | 389 |   |   | 24,671 |   |
| Effect                  of the Acquisition, net                                                                                                                 |   |                                      | ---      |   |   | --- |   |   | 38,423 |   |
| Non-cash                  stock-based compensation                                                                                                              |   |                                      | 248      |   |   | 30 |   |   | 48,561 |   |
| Loss                  from debt retirement                                                                                                                      |   |                                      | ---      |   |   | --- |   |   | 130,736 |   |
| Gain                  on the sale of discontinued operations                                                                                                    |   |                                      | ---      |   |   | --- |   |   | (125,200 | ) |
| Gain                  on sale of fixed assets                                                                                                                   |   |                                      | (220     | ) |   | --- |   |   | --- |   |
| Deferred                    federal income tax provision from continuing                    operations                                                          |   |                                      | 22,700   |   |   | --- |   |   | 9,800 |   |
| Deferred                    federal income tax credit from discontinued                    operations                                                           |   |                                      | ---      |   |   | --- |   |   | (18,500 | ) |
| **Changes                    in certain assets and liabilities, net of  effects                    from acquisitions and dispositions:**                   |   |                                      |     |   |   |   |   |   |   |   |
| Accounts                  receivable, net                                                                                                                       |   |                                      | (64,462  | ) |   | (1,347 | ) |   | (26,921 | ) |
| Inventories                                                                                                                                                     |   |                                      | (11,633  | ) |   | (5,907 | ) |   | (34,337 | ) |
| Prepaids                  and other current assets                                                                                                              |   |                                      | (8,197   | ) |   | 17,853 |   |   | (14,363 | ) |
| Net                  assets of discontinued operations                                                                                                          |   |                                      | ---      |   |   | --- |   |   | 2,326 |   |
| Accounts                  payable                                                                                                                               |   |                                      | 32,849   |   |   | (15,274 | ) |   | 52,669 |   |
| Accrued                  expenses and taxes                                                                                                                     |   |                                      | (3,060   | ) |   | 14,768 |   |   | (33,926 | ) |
| Long-term                  assets, liabilities and other, net                                                                                                   |   |                                      | (3,880   | ) |   | (1,672 | ) |   | 835 |   |
|                     Total adjustments to net earnings (loss)                                                                                          |   |                                      | 2,777    |   |   | 15,147 |   |   | 80,597 |   |
|                     Net cash provided by operating activities                                                                                         |   | $                                         | 59,777   |   | $ | 14,747 |   | $ | 36,697 |   |
|                                                                                                                                                            |   |                                      |     |   |   |   |   |   |   |   |
| **Cash                  Flows from investing activities:**                                                                                                      |   |                                      |     |   |   |   |   |   |   |   |
| Capital                  expenditures                                                                                                                           |   | $                                         | (15,020  | ) | $ | (2,620 | ) | $ | (11,848 | ) |
| Net                  cash paid for businesses acquired                                                                                                          |   |                                      | (88,800  | ) |   | --- |   |   | (16,500 | ) |
| Purchase                    of outstanding equity shares of the Company by Thomas H. Lee                    Partners,                    L.P. and affiliates    |   |                                      | ---      |   |   | (706,189 | ) |   | --- |   |
| Purchase                  of investments and marketable securities                                                                                              |   |                                      | ---      |   |   | --- |   |   | (5,000 | ) |
| Proceeds                  from the sale of investments and marketable securities                                                                                |   |                                      | ---      |   |   | --- |   |   | 5,000 |   |
| Payment                  of Acquisition fees and expenses                                                                                                       |   |                                      | ---      |   |   | (57,000 | ) |   | --- |   |
| Proceeds                  from the sale of discontinued businesses                                                                                              |   |                                      | ---      |   |   | --- |   |   | 526,000 |   |
| Proceeds                  from the sale of property and equipment                                                                                               |   |                                      | 6,144    |   |   | --- |   |   | --- |   |
| Change                  in restricted cash and investments                                                                                                      |   |                                      | (2,070   | ) |   | 1 |   |   | (103 | ) |
| Other,                  net                                                                                                                                     |   |                                      | (1,485   | ) |   | (53 | ) |   | (291 | ) |
|                     Net cash (used in) provided by investing activities                                                                               |   |                                      | (101,231 | ) |   | (765,861 | ) |   | 497,258 |   |
| **Cash                  Flows from financing activities:**                                                                                                      |   |                                      |     |   |   |   |   |   |   |   |
| Change                  in borrowings, net                                                                                                                      |   |                                      | (6,305   | ) |   | (484 | ) |   | (5,370 | ) |
| Sale                  of Floating Rate Notes                                                                                                                    |   |                                      | ---      |   |   | --- |   |   | 196,000 |   |
| Redemption                  of notes in connection with the Acquisition                                                                                         |   |                                      | ---      |   |   | (919,300 | ) |   | --- |   |
| Redemption                  of Senior Notes                                                                                                                     |   |                                      | ---      |   |   | --- |   |   | (716,700 | ) |
| Net                  proceeds from the sale of the 8 1/2% Notes                                                                                                 |   |                                      | ---      |   |   | 605,400 |   |   | --- |   |
| Net                    proceeds from borrowings under the Senior Secured Credit                    Facility                                                     |   |                                      | ---      |   |   | 685,350 |   |   | --- |   |
| Equity                    investment by Thomas H. Lee Partners, L.P. and                    affiliates                                                          |   |                                      | ---      |   |   | 361,841 |   |   | --- |   |
| Settlement                  of stock options                                                                                                                    |   |                                      | ---      |   |   | (113,032 | ) |   | --- |   |
| Other,                  net                                                                                                                                     |   |                                      | (207     | ) |   | 76 |   |   | (55 | ) |
|                     Net cash (used in) provided by financing activities                                                                               |   |                                      | (6,512   | ) |   | 619,851 |   |   | (526,125 | ) |
| Net                  (decrease) increase in unrestricted cash and cash                  equivalents                                                             |   |                                      | (47,966  | ) |   | (131,263 | ) |   | 7,830 |   |
| Unrestricted                    cash and cash equivalents at the beginning                    of the period                                                     |   |                                      | 94,955   |   |   | 201,950 |   |   | 194,120 |   |
| Unrestricted                  cash and cash equivalents at the end of the period                                                                                |   | $                                         | 46,989   |   | $ | 70,687 |   | $ | 201,950 |   |
|                                                                                                                                                            |   |                                      |     |   |   |   |   |   |   |   |
| **Supplemental                  disclosure of cash flow information:**                                                                                          |   |                                      |     |   |   |   |   |   |   |   |
| Interest                  paid                                                                                                                                  |   | $                                         | 85,659   |   | $ | 16,676 |   | $ | 71,640 |   |
| Income                  taxes paid (refunded), net                                                                                                              |   | $                                         | 9,264    |   | $ | (35,437 | ) | $ | 43,517 |   |

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

**NORTEK,      INC. AND SUBSIDIARIES**

**UNAUDITED      CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER’S      INVESTMENT**

**FOR      THE PERIOD JULY 4, 2004 TO AUGUST 27, 2004**

*(Dollar      amounts in thousands)*

|                                                                   |   | **Former                Nortek** |   | **Former                Nortek** |   |                       |   |         |    |                             |   |                             |   |
|------------------------------------------------------------------------|--------|----------------------------------|--------|----------------------------------|--------|----------------------------|--------|--------------|---------|----------------------------------|--------|----------------------------------|--------|
|                                                                   |   | **Holdings**                     |   | **Holdings**                     |   |                       |   |         |    | **Accumulated**                  |   |                             |   |
|                                                                   |   | **Series                B**      |   | **Class                A**       |   | **Additional**             |   |         |    | **Other**                        |   |                             |   |
|                                                                   |   | **Preference**                   |   | **Common**                       |   | **Paid                in** |   | **Retained** |    | **Comprehensive**                |   | **Comprehensive**                |   |
|                                                                   |   | **Stock**                        |   | **Stock**                        |   | **Capital**                |   | **Earnings** |    | **Income                (Loss)** |   | **Income                (Loss)** |   |
|                                                                   |   |                             |   |                             |   |                       |   |         |    |                             |   |                             |   |
|                                                                   |   |                             |   |                             |   |                       |   |         |    |                             |   |                             |   |
| **Balance,                July 3, 2004**                               |   | $                                | 8,130  |                             | $      | 397                        |   | $            | 177,486 |                             | $      | 87,000                           |   | $ | 15,691 |   | $ | --- |   |
| Net                loss                                                |   |                             | ---    |                             |   | ---                        |   |         | ---     |                             |   | (130,900                         | )      |   | --- |   |   | (130,900 | ) |
| Other                comprehensive income (loss):                      |   |                             |   |                             |   |                       |   |         |    |                             |   |                             |   |   |   |   |   |   |   |
|                   Currency translation adjustment            |   |                             | ---    |                             |   | ---                        |   |         | ---     |                             |   | ---                              |   |   | (197 | ) |   | (197 | ) |
|                   Unrealized appreciation in the fair value  |   |                             |   |                             |   |                       |   |         |    |                             |   |                             |   |   |   |   |   |   |   |
|                      of marketable securities |   |                             | ---    |                             |   | ---                        |   |         | ---     |                             |   | ---                              |   |   | 24 |   |   | 24 |   |
| Comprehensive                loss                                      |   |                             |   |                             |   |                       |   |         |    |                             |   |                             |   |   |   |   | $ | (131,073 | ) |
| Settlement                and cancellation of stock options, net       |   |                             | ---    |                             |   | ---                        |   |         | (43,035 | )                                |   | ---                              |   |   | --- |   |   |   |   |
| Subtotal                                                               |   |                             | 8,130  |                             |   | 397                        |   |         | 134,451 |                             |   | (43,900                          | )      |   | 15,518 |   |   |   |   |
| Effect                of the Acquisition                               |   |                             | (8,130 | )                                |   | (397                       | )      |         | 272,987 |                             |   | 43,900                           |   |   | (15,518 | ) |   |   |   |
| **Balance,                August 27, 2004**                            |   | $                                | ---    |                             | $      | ---                        |   | $            | 407,438 |                             | $      | ---                              |   | $ | --- |   |   |   |   |

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

**NORTEK,      INC. AND SUBSIDIARIES**

**UNAUDITED      CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER’S      INVESTMENT**

**FOR      THE PERIOD JANUARY 1, 2004 TO AUGUST 27, 2004**

*(Dollar      amounts in thousands)*

|                                                                       |   | **Former                  Nortek** |   | **Former                  Nortek** |   |                         |   |         |    |                               |   |                               |   |
|----------------------------------------------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|------------------------------|--------|--------------|---------|------------------------------------|--------|------------------------------------|--------|
|                                                                       |   | **Holdings**                       |   | **Holdings**                       |   |                         |   |         |    | **Accumulated**                    |   |                               |   |
|                                                                       |   | **Series                  B**      |   | **Class                  A**       |   | **Additional**               |   |         |    | **Other**                          |   |                               |   |
|                                                                       |   | **Preference**                     |   | **Common**                         |   | **Paid                  in** |   | **Retained** |    | **Comprehensive**                  |   | **Comprehensive**                  |   |
|                                                                       |   | **Stock**                          |   | **Stock**                          |   | **Capital**                  |   | **Earnings** |    | **Income                  (Loss)** |   | **Income                  (Loss)** |   |
|                                                                       |   |                               |   |                               |   |                         |   |         |    |                               |   |                               |   |
|                                                                       |   |                               |   |                               |   |                         |   |         |    |                               |   |                               |   |
| **Balance,                  December 31, 2003**                            |   | $                                  | 8,130  |                               | $      | 397                          |   | $            | 172,244 |                               | $      | ---                                |   | $ | 19,437 |   | $ | --- |   |
| Net                  loss                                                  |   |                               | ---    |                               |   | ---                          |   |         | ---     |                               |   | (43,900                            | )      |   | --- |   |   | (43,900 | ) |
| Other                  comprehensive income (loss):                        |   |                               |   |                               |   |                         |   |         |    |                               |   |                               |   |   |   |   |   |   |   |
|                     Currency translation adjustment              |   |                               | ---    |                               |   | ---                          |   |         | ---     |                               |   | ---                                |   |   | (3,958 | ) |   | (3,958 | ) |
|                     Unrealized appreciation in the fair value of |   |                               |   |                               |   |                         |   |         |    |                               |   |                               |   |   |   |   |   |   |   |
|                        marketable securities      |   |                               | ---    |                               |   | ---                          |   |         | ---     |                               |   | ---                                |   |   | 21 |   |   | 21 |   |
| Minimum                  pension liability, net of tax of $10              |   |                               | ---    |                               |   | ---                          |   |         | ---     |                               |   | ---                                |   |   | 18 |   |   | 18 |   |
| Comprehensive                  loss                                        |   |                               |   |                               |   |                         |   |         |    |                               |   |                               |   |   |   |   | $ | (47,819 | ) |
| Stock-based                  compensation                                  |   |                               | ---    |                               |   | ---                          |   |         | 5,242   |                               |   | ---                                |   |   | --- |   |   |   |   |
| Settlement                  and cancellation of stock options, net         |   |                               | ---    |                               |   | ---                          |   |         | (43,035 | )                                  |   | ---                                |   |   | --- |   |   |   |   |
| Subtotal                                                                   |   |                               | 8,130  |                               |   | 397                          |   |         | 134,451 |                               |   | (43,900                            | )      |   | 15,518 |   |   |   |   |
| Effect                  of the Acquisition                                 |   |                               | (8,130 | )                                  |   | (397                         | )      |         | 272,987 |                               |   | 43,900                             |   |   | (15,518 | ) |   |   |   |
| **Balance,                  August 27, 2004**                              |   | $                                  | ---    |                               | $      | ---                          |   | $            | 407,438 |                               | $      | ---                                |   | $ | --- |   |   |   |   |

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

**NORTEK,      INC. AND SUBSIDIARIES**

**UNAUDITED      CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER’S      INVESTMENT**

**FOR      THE PERIOD AUGUST 28, 2004 TO OCTOBER 2, 2004**

*(Dollar      amounts in thousands)*

|                                                                                                    |   |                       |    |            |   | **Accumulated**                  |   |                             |   |
|---------------------------------------------------------------------------------------------------------|--------|----------------------------|---------|-----------------|--------|----------------------------------|--------|----------------------------------|--------|
|                                                                                                    |   | **Additional**             |    |            |   | **Other**                        |   |                             |   |
|                                                                                                    |   | **Paid                in** |    | **Accumulated** |   | **Comprehensive**                |   | **Comprehensive**                |   |
|                                                                                                    |   | **Capital**                |    | **Deficit**     |   | **Income                (Loss)** |   | **Income                (Loss)** |   |
|                                                                                                    |   |                       |    |            |   |                             |   |                             |   |
| **Balance,                August 28, 2004**                                                             |   | $                          | 407,438 |            | $      | ---                              |   | $                                | ---    |   | $ | --- |   |
| Net                loss                                                                                 |   |                       | ---     |            |   | (400                             | )      |                             | ---    |   |   | (400 | ) |
| Other                comprehensive income (loss):                                                       |   |                       |    |            |   |                             |   |                             |   |   |   |   |   |
|                   Currency translation adjustment                                             |   |                       | ---     |            |   | ---                              |   |                             | 3,989  |   |   | 3,989 |   |
|   Unrealized                decline in the fair value of                marketable securities |   |                       | ---     |            |   | ---                              |   |                             | (9     | ) |   | (9 | ) |
| Comprehensive                income                                                                     |   |                       |    |            |   |                             |   |                             |   |   | $ | 3,580 |   |
| Capital                contribution from parent                                                         |   |                       | 211     |            |   | ---                              |   |                             | ---    |   |   |   |   |
| Stock-based                compensation                                                                 |   |                       | 30      |            |   | ---                              |   |                             | ---    |   |   |   |   |
| **Balance,                October 2, 2004**                                                             |   | $                          | 407,679 |            | $      | (400                             | )      | $                                | 3,980  |   |   |   |   |

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

**NORTEK,      INC. AND SUBSIDIARIES**

**UNAUDITED      CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER’S      INVESTMENT**

**FOR      THE THREE MONTHS ENDED OCTOBER 1, 2005**

*(Dollar      amounts in thousands)*

|                                                                                                             |   |                         |    |         |   | **Accumulated**                    |   |                               |   |
|------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|--------------|--------|------------------------------------|--------|------------------------------------|--------|
|                                                                                                             |   | **Additional**               |    |         |   | **Other**                          |   |                               |   |
|                                                                                                             |   | **Paid                  in** |    | **Retained** |   | **Comprehensive**                  |   | **Comprehensive**                  |   |
|                                                                                                             |   | **Capital**                  |    | **Earnings** |   | **Income                  (Loss)** |   | **Income                  (Loss)** |   |
|                                                                                                             |   |                         |    |         |   |                               |   |                               |   |
|                                                                                                             |   |                         |    |         |   |                               |   |                               |   |
| **Balance,                  July 2, 2005**                                                                       |   | $                            | 414,265 |         | $      | 29,300                             |   | $                                  | 2,457  |   | $ | --- |   |
| Net                  earnings                                                                                    |   |                         | ---     |         |   | 25,000                             |   |                               | ---    |   |   | 25,000 |   |
| Other                  comprehensive income (loss):                                                              |   |                         |    |         |   |                               |   |                               |   |   |   |   |   |
|                     Currency translation adjustment                                                    |   |                         | ---     |         |   | ---                                |   |                               | 4,996  |   |   | 4,996 |   |
|                       Unrealized decline in the fair value of marketable                    securities |   |                         | ---     |         |   | ---                                |   |                               | (13    | ) |   | (13 | ) |
| Comprehensive                  income                                                                            |   |                         |    |         |   |                               |   |                               |   |   | $ | 29,983 |   |
| Capital                  contribution from parent                                                                |   |                         | 264     |         |   | ---                                |   |                               | ---    |   |   |   |   |
| Stock-based                  compensation                                                                        |   |                         | 90      |         |   | ---                                |   |                               | ---    |   |   |   |   |
| **Balance,                  October 1, 2005**                                                                    |   | $                            | 414,619 |         | $      | 54,300                             |   | $                                  | 7,440  |   |   |   |   |

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

**NORTEK,      INC. AND SUBSIDIARIES**

**UNAUDITED      CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER’S      INVESTMENT**

**FOR      THE NINE MONTHS ENDED OCTOBER 1, 2005**

*(Dollar      amounts in thousands)*

|                                                                                                               |   |                       |    | **Retained**     |   | **Accumulated**                  |   |                             |   |
|--------------------------------------------------------------------------------------------------------------------|--------|----------------------------|---------|------------------|--------|----------------------------------|--------|----------------------------------|--------|
|                                                                                                               |   | **Additional**             |    | **Earnings**     |   | **Other**                        |   |                             |   |
|                                                                                                               |   | **Paid                in** |    | **(Accumulated** |   | **Comprehensive**                |   | **Comprehensive**                |   |
|                                                                                                               |   | **Capital**                |    | **Deficit)**     |   | **Income                (Loss)** |   | **Income                (Loss)** |   |
|                                                                                                               |   |                       |    |             |   |                             |   |                             |   |
| **Balance,                December 31, 2004**                                                                      |   | $                          | 410,581 |             | $      | (2,700                           | )      | $                                | 9,065  |   | $ | --- |   |
| Net                earnings                                                                                        |   |                       | ---     |             |   | 57,000                           |   |                             | ---    |   |   | 57,000 |   |
| Other                comprehensive income (loss):                                                                  |   |                       |    |             |   |                             |   |                             |   |   |   |   |   |
|                    Currency translation adjustment                                                  |   |                       | ---     |             |   | ---                              |   |                             | (1,619 | ) |   | (1,619 | ) |
|                      Unrealized decline in the fair value of marketable                  securities |   |                       | ---     |             |   | ---                              |   |                             | (6     | ) |   | (6 | ) |
| Comprehensive                income                                                                                |   |                       |    |             |   |                             |   |                             |   |   | $ | 55,375 |   |
| Capital                contribution from parent                                                                    |   |                       | 3,790   |             |   | ---                              |   |                             | ---    |   |   |   |   |
| Stock-based                compensation                                                                            |   |                       | 248     |             |   | ---                              |   |                             | ---    |   |   |   |   |
| **Balance,                October 1, 2005**                                                                        |   | $                          | 414,619 |             | $      | 54,300                           |   | $                                | 7,440  |   |   |   |   |

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

**NORTEK,        INC. AND SUBSIDIARIES**

**NOTES        TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL        STATEMENTS**

**OCTOBER        1, 2005 AND OCTOBER 2, 2004**

**Stock-Based      Compensation of Employees, Officers and Directors **

| (B) | On                July 15, 2004, THL Buildco Holdings, Inc. (“THL Buildco Holdings”) and THL                Buildco, Inc. (“THL Buildco”), newly formed Delaware corporations                affiliated with Thomas H. Lee Partners L.P., entered into a stock                purchase                agreement with the owners of Nortek Holdings, Inc., Nortek’s former parent                company (referred to herein as “the former Nortek Holdings”), which                included affiliates of Kelso & Company, L.P. (“Kelso”) and certain                members of the Company’s management, pursuant to which THL Buildco agreed                to purchase all the outstanding capital stock of the former Nortek                Holdings. Prior to the completion of the THL Transaction described                below,                Nortek was a wholly-owned direct subsidiary of the former Nortek                Holdings                and THL Buildco was a wholly-owned direct subsidiary of THL Buildco                Holdings. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**The      Acquisition **

|                                               |   | **Pro                Forma for the Period**                       |    |
|----------------------------------------------------|--------|-------------------------------------------------------------------|---------|
|                                               |   | **July                4, 2004 -****Aug.                27, 2004** |    | **Jan.                1, 2004 -****Aug.                27, 2004** |   |
|                                               |   | *(Amounts                in thousands)*                           |    |
|                                               |   |                                                              |    |   |   |
| Net                sales                           |   | $                                                                 | 266,836 |   | $ | 1,117,860 |   |
| Operating                earnings                  |   | $                                                                 | 27,469  |   | $ | 108,852 |   |
| Earnings                from continuing operations |   | $                                                                 | 6,489   |   | $ | 27,450 |   |

|                                                                                                   |   | **Continuing**                          |          | **Discontinued** |   |        |   |
|--------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|---------------|------------------|--------|-------------|--------|
|                                                                                                   |   | **Operations**                          |          | **Operations**   |   | **Total**   |   |
|                                                                                                   |   | *(Amounts                in thousands)* |          |
|                                                                                                   |   |                                    |          |             |   |        |   |
| **Balance                as of December 31, 2003**                                                     |   | **$**                                   | **675,846**   |             | **$**  | **222,194** |   | **$** | **898,040** |   |
| Acquisitions                during the period from January 1, 2004 to August 27, 2004                  |   |                                    | 6,841         |             |   | ---         |   |   | 6,841 |   |
| Dispositions                                                                                           |   |                                    | ---           |             |   | (222,194    | )      |   | (222,194 | ) |
| Purchase                accounting adjustments                                                         |   |                                    | (3,229        | )                |   | ---         |   |   | (3,229 | ) |
| Impact                of foreign currency translation                                                  |   |                                    | 1             |             |   | ---         |   |   | 1 |   |
| **Balance                as of August 27, 2004**                                                       |   |                                    | **679,459**   |             |   | **---**     |   |   | **679,459** |   |
| Effect                of the Acquisition                                                               |   |                                    | 607,053       |             |   | ---         |   |   | 607,053 |   |
| Acquisitions                during the period from August                28, 2004 to December 31, 2004 |   |                                    | 8,805         |             |   | ---         |   |   | 8,805 |   |
| Purchase                accounting adjustments                                                         |   |                                    | (2,005        | )                |   | ---         |   |   | (2,005 | ) |
| Impact                of foreign currency translation                                                  |   |                                    | 1,793         |             |   | ---         |   |   | 1,793 |   |
| **Balance                as of December 31, 2004**                                                     |   |                                    | **1,295,105** |             |   | **---**     |   |   | **1,295,105** |   |
| Acquisitions                during the nine months ended October                1, 2005                |   |                                    | 90,234        |             |   | ---         |   |   | 90,234 |   |
| Purchase                accounting adjustments                                                         |   |                                    | (1,105        | )                |   | ---         |   |   | (1,105 | ) |
| Impact                of foreign currency translation                                                  |   |                                    | (386          | )                |   | ---         |   |   | (386 | ) |
| **Balance                as of October 1, 2005**                                                       |   | **$**                                   | **1,383,848** |             | **$**  | **---**     |   | **$** | **1,383,848** |   |

| (C) | On                August 27, 2004 in connection with the Acquisition, the Company purchased                for cash through a tender offer or redeemed for cash pursuant to                the                applicable indenture governing such notes all of the former Nortek                Holdings’ 10% Senior Discount Notes due 2011 (the “Senior Discount Notes)                (approximately $376,500,000 of accreted principal as of August 27,                2004),                all of its outstanding $200,000,000 in principal amount Floating                Rate                Notes due 2010 (the “Floating Rate Notes), and approximately $240,000,000                principal amount of its outstanding 9 7/8% Senior Subordinated Notes                due                2011 ($250,000,000 in principal amount outstanding immediately before                the                Acquisition) (the “9 7/8% Notes”). The Company recorded a pre-tax loss                from debt retirement of approximately $118,778,000 in the period                from July                4, 2004 to August 27, 2004 as a result of these debt redemptions.                As the                indenture governing the 9 7/8% Notes does not allow for redemption,                after                completion of the tender offer on August 27, 2004, approximately                $10,000,000 in aggregate principal amount of such notes remains                outstanding. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (D) | On                August 26, 2005, the Company acquired the assets of Sunfire Corporation                (“Sunfire”) for approximately $4,000,000 (utilizing approximately                $3,500,000 of cash on hand and issuing an unsecured subordinated                promissory note in the amount of approximately $500,000) plus contingent                consideration. Sunfire is located in Snohomish, WA and manufactures                and                designs home audio and home cinema amplifiers, receivers and                subwoofers. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Expense                related to the cancellation of stock options, net                                                                                |   | $      | 45,200,000 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|
| Sellers                fees and expenses                                                                                                                |   |   | 26,000,000 |   |
| Expense                related to settlement and termination of certain benefits with two                of the                Company’s officers |   |   | 10,200,000 |   |
| Other                                                                                                                                                   |   |   | 2,300,000  |   |
|                                                                                                                                                    |   | $      | 83,700,000 |   |

| (F) | On                July 31, 2004, the Company sold the capital stock of its wholly-owned                subsidiary, La Cornue SAS (“La Cornue”) for net cash proceeds of                approximately $5,800,000 and recorded a net after tax gain of                approximately $900,000. La Cornue, situated outside of Paris, France                manufactures and sells high-end custom made cooking ranges. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                               |   | **Pre-Acquisition**                       |   |
|------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                                               |   | **For                  the Periods**      |   |
|                                                                               |   | **July                  4, 2004 -**       |   | **Jan.                  1, 2004 -** |   |
|                                                                               |   | **Aug.                  27, 2004**        |   | **Aug.                  27, 2004** |   |
|                                                                               |   | *(Amounts                  in thousands)* |   |
|                                                                               |   |                                      |   |   |   |
| Net                  sales                                                         |   | $                                         | 3,500  |   | $ | 48,900 |   |
|                                                                               |   |                                      |   |   |   |   |   |
| Operating                  loss of discontinued operations *                       |   | $                                         | (4,006 | ) | $ | (7,743 | ) |
| Interest                  income (expense), net                                    |   |                                      | 6      |   |   | (4,557 | ) |
| Loss                  before income tax benefit                                    |   |                                      | (4,000 | ) |   | (12,300 | ) |
| Income                  tax benefit                                                |   |                                      | (1,800 | ) |   | (4,700 | ) |
| Loss                  from discontinued operations                                 |   |                                      | (2,200 | ) |   | (7,600 | ) |
|                                                                               |   |                                      |   |   |   |   |   |
| Gain                  on sale of discontinued operations                           |   |                                      | 2,500  |   |   | 125,200 |   |
| Income                  tax (benefit) provision on sale of discontinued operations |   |                                      | (200   | ) |   | 50,200 |   |
|                                                                               |   |                                      | 2,700  |   |   | 75,000 |   |
|                                                                               |   |                                      |   |   |   |   |   |
| Earnings                  from discontinued operations                             |   | $                                         | 500    |   | $ | 67,400 |   |
|                                                                               |   |                                      |   |   |   |   |   |
| Depreciation                  and amortization expense                             |   | $                                         | 8      |   | $ | 1,413 |   |

|   | * | Operating                loss of discontinued operations are net of Ply Gem corporate expenses,                which were previously included within Unallocated in the Company’s segment                reporting. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (G) | The                Company has two reportable segments: the Residential Building Products                Segment and the Air Conditioning and Heating Products Segment. In                the                tables below, Unallocated includes corporate related items, intersegment                eliminations and certain income and expense items not allocated to                reportable segments. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                    |   | **For                  the Periods**      |    |
|-----------------------------------------------------------------------------------------|--------|-------------------------------------------|---------|
|                                                                                    |   | **Post-Acquisition**                      |    | **Pre-Acquisition** |   |
|                                                                                    |   | **July                  3, 2005 -**       |    | **Aug.                  28, 2004 -** |   | **July                  4, 2004 -** |   |
|                                                                                    |   | **Oct.                  1, 2005**         |    | **Oct.                  2, 2004** |   | **Aug.                  27, 2004** |   |
|                                                                                    |   | *(Amounts                  in thousands)* |    |
|                                                                                    |   |                                      |    |   |   |   |   |
| **Net                  sales:**                                                         |   |                                      |    |   |   |   |   |
| Residential                  building products                                          |   | $                                         | 299,077 |   | $ | 99,185 |   | $ | 146,523 |   |
| Air                  conditioning and heating products                                  |   |                                      | 223,789 |   |   | 61,843 |   |   | 120,313 |   |
|                     Consolidated net sales                                    |   | $                                         | 522,866 |   | $ | 161,028 |   | $ | 266,836 |   |
|                                                                                    |   |                                      |    |   |   |   |   |   |   |   |
| **Operating                  earnings (loss):**                                         |   |                                      |    |   |   |   |   |   |   |   |
| Residential                  building products *                                        |   | $                                         | 51,373  |   | $ | 16,387 |   | $ | 20,711 |   |
| Air                  conditioning and heating products *                                |   |                                      | 22,154  |   |   | 1,168 |   |   | 217 |   |
|                     Subtotal                                                  |   |                                      | 73,527  |   |   | 17,555 |   |   | 20,928 |   |
| **Unallocated:**                                                                        |   |                                      |    |   |   |   |   |   |   |   |
| Expenses                    and charges arising from the                    Acquisition |   |                                      | ---     |   |   | --- |   |   | (38,500 | ) |
| Stock-based                  compensation charges                                       |   |                                      | (100    | ) |   | --- |   |   | (34,100 | ) |
| Other,                  net                                                             |   |                                      | (5,847  | ) |   | (2,090 | ) |   | (4,299 | ) |
|                     Consolidated operating earnings (loss)                    |   |                                      | 67,580  |   |   | 15,465 |   |   | (55,971 | ) |
| Interest                  expense                                                       |   |                                      | (26,544 | ) |   | (16,197 | ) |   | (12,092 | ) |
| Loss                  from debt retirement                                              |   |                                      | ---     |   |   | --- |   |   | (118,778 | ) |
| Investment                  income                                                      |   |                                      | 264     |   |   | 32 |   |   | 241 |   |
| Earnings                    (loss) before provision (benefit) for income taxes          |   | $                                         | 41,300  |   | $ | (700 | ) | $ | (186,600 | ) |

|   | * | The                operating results of the Residential Building Products Segment for                the                periods from August 28, 2004 to October 2, 2004 and from July 4,                2004 to                August 27, 2004 include non-cash foreign exchange losses of approximately                $100,000 and $300,000, respectively, related to intercompany debt                not                permanently invested in the Company’s subsidiaries. The operating results                of the Residential Building Products Segment for the period from                July 4,                2004 to August 27, 2004 also include approximately $5,300,000 of                stock-based compensation charges (see Note                A). |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                           |   | **For                  the Periods**      |      |
|--------------------------------------------------------------------------------|--------|-------------------------------------------|-----------|
|                                                                           |   | **Post-Acquisition**                      |      | **Pre-Acquisition** |   |
|                                                                           |   | **Jan.                  1, 2005 -**       |      | **Aug.                  28, 2004 -** |   | **Jan.                  1, 2004 -** |   |
|                                                                           |   | **Oct.                  1, 2005**         |      | **Oct.                  2, 2004** |   | **Aug.                  27, 2004** |   |
|                                                                           |   | *(Amounts                  in thousands)* |      |
|                                                                           |   |                                      |      |   |   |   |   |
| **Net                  sales:**                                                |   |                                      |      |   |   |   |   |   |   |   |
| Residential                  building products                                 |   | $                                         | 839,029   |   | $ | 99,185 |   | $ | 623,859 |   |
| Air                  conditioning and heating products                         |   |                                      | 616,815   |   |   | 61,843 |   |   | 494,001 |   |
|                     Consolidated net sales                           |   | $                                         | 1,455,844 |   | $ | 161,028 |   | $ | 1,117,860 |   |
|                                                                           |   |                                      |      |   |   |   |   |   |   |   |
| **Operating                  earnings:**                                       |   |                                      |      |   |   |   |   |   |   |   |
| Residential                  building products *                               |   | $                                         | 135,012   |   | $ | 16,387 |   | $ | 102,808 |   |
| Air                  conditioning and heating products *                       |   |                                      | 49,927    |   |   | 1,168 |   |   | 25,507 |   |
|                     Subtotal                                         |   |                                      | 184,939   |   |   | 17,555 |   |   | 128,315 |   |
| **Unallocated:**                                                               |   |                                      |      |   |   |   |   |   |   |   |
| Expenses                    and charges arising from the Acquisition           |   |                                      | ---       |   |   | --- |   |   | (38,500 | ) |
| Stock-based                  compensation charges                              |   |                                      | (300      | ) |   | --- |   |   | (36,400 | ) |
| Foreign                  exchange loss on intercompany debt                    |   |                                      | (300      | ) |   | --- |   |   | (200 | ) |
| Gain                  on legal settlement                                      |   |                                      | 1,400     |   |   | --- |   |   | --- |   |
| Other,                  net                                                    |   |                                      | (18,192   | ) |   | (2,090 | ) |   | (20,626 | ) |
|                     Consolidated operating earnings                  |   |                                      | 167,547   |   |   | 15,465 |   |   | 32,589 |   |
| Interest                  expense                                              |   |                                      | (75,973   | ) |   | (16,197 | ) |   | (56,073 | ) |
| Loss                  from debt retirement                                     |   |                                      | ---       |   |   | --- |   |   | (130,736 | ) |
| Investment                  income                                             |   |                                      | 1,026     |   |   | 32 |   |   | 1,520 |   |
| Earnings                    (loss) before provision (benefit) for income taxes |   | $                                         | 92,600    |   | $ | (700 | ) | $ | (152,700 | ) |

|   | * | The                operating results of the Residential Building Products Segment for                the                nine months ended October 1, 2005 and the periods from August 28,                2004 to                October 2, 2004 and from January 1, 2004 to August 27, 2004 include                non-cash foreign exchange losses of approximately $1,000,000, $100,000                and                $600,000, respectively, related to intercompany debt not permanently                invested in the Company’s subsidiaries. The operating results of the                Residential Building Products Segment for the period from January                1, 2004                to August 27, 2004 also include approximately $5,900,000 of stock-based                compensation charges (see Note A). |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                 |   | **For                  the Periods**      |   |
|----------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                                                                                 |   | **Post-Acquisition**                      |   | **Pre-Acquisition** |   |
|                                                                                                                 |   | **July                  3, 2005 -**       |   | **Aug.                  28, 2004 -** |   | **July                  4, 2004 -** |   |
|                                                                                                                 |   | **Oct.                  1, 2005**         |   | **Oct.                  2, 2004** |   | **Aug.                  27, 2004** |   |
|                                                                                                                 |   | *(Amounts                  in thousands)* |   |
|                                                                                                                 |   |                                      |   |   |   |   |   |
| **Depreciation                  Expense:**                                                                           |   |                                      |   |   |   |   |   |
| Residential                  building products                                                                       |   | $                                         | 3,406  |   | $ | 1,288 |   | $ | 2,036 |   |
| Air                  conditioning and heating products                                                               |   |                                      | 3,239  |   |   | 1,171 |   |   | 1,800 |   |
| Other                                                                                                                |   |                                      | 231    |   |   | 65 |   |   | 103 |   |
| Consolidated                  depreciation expense                                                                   |   | $                                         | 6,876  |   | $ | 2,524 |   | $ | 3,939 |   |
|                                                                                                                 |   |                                      |   |   |   |   |   |   |   |   |
| **Amortization                  of intangible assets and purchase price allocated to inventory                  *:** |   |                                      |   |   |   |   |   |   |   |   |
| Residential                  building products                                                                       |   | $                                         | 3,837  |   | $ | 2,953 |   | $ | 1,503 |   |
| Air                  conditioning and heating products                                                               |   |                                      | 797    |   |   | 782 |   |   | 519 |   |
| Other                                                                                                                |   |                                      | 126    |   |   | 48 |   |   | --- |   |
| Consolidated                    amortization expense and purchase price allocated to                    inventory    |   | $                                         | 4,760  |   | $ | 3,783 |   | $ | 2,022 |   |
|                                                                                                                 |   |                                      |   |   |   |   |   |   |   |   |
| **Capital                  Expenditures **:**                                                                        |   |                                      |   |   |   |   |   |   |   |   |
| Residential                  building products                                                                       |   | $                                         | 2,390  |   | $ | 679 |   | $ | 2,157 |   |
| Air                  conditioning and heating products                                                               |   |                                      | 4,316  |   |   | 2,208 |   |   | 1,008 |   |
| Other                                                                                                                |   |                                      | 225    |   |   | --- |   |   | 5 |   |
| Consolidated                  capital expenditures                                                                   |   | $                                         | 6,931  |   | $ | 2,887 |   | $ | 3,170 |   |

|   | * | During                the three months ended October 1, 2005 and the period from August                28, 2004                to October 2, 2004 the Company reflected amortization of approximately                $400,000 and $1,900,000, respectively, in the Residential Building                Products Segment and for the period from August 28, 2004 to October                2,                2004 approximately $500,000 in the Air Conditioning and Heating Products                Segment of excess purchase price allocated to inventory as a non-cash                charge to cost of products sold. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ** | Includes                capital expenditures financed under capital leases of approximately                $1,100,000, $300,000 and $900,000 for the three months ended October                1,                2005 and the periods from August 28, 2004 to October 2, 2004 and                from July                4, 2004 to August 27, 2004, respectively. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                 |   | **For                  the Periods**      |   |
|----------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                                                                                 |   | **Post-Acquisition**                      |   | **Pre-Acquisition** |   |
|                                                                                                                 |   | **Jan.                  1, 2005 -**       |   | **Aug.                  28, 2004 -** |   | **Jan.                  1, 2004 -** |   |
|                                                                                                                 |   | **Oct.                  1, 2005**         |   | **Oct.                  2, 2004** |   | **Aug.                  27, 2004** |   |
|                                                                                                                 |   | *(Amounts                  in thousands)* |   |
|                                                                                                                 |   |                                      |   |   |   |   |   |
| **Depreciation                  Expense:**                                                                           |   |                                      |   |   |   |   |   |
| Residential                  building products                                                                       |   | $                                         | 10,174 |   | $ | 1,288 |   | $ | 8,495 |   |
| Air                  conditioning and heating products                                                               |   |                                      | 9,605  |   |   | 1,171 |   |   | 7,828 |   |
| Other                                                                                                                |   |                                      | 655    |   |   | 65 |   |   | 408 |   |
| Consolidated                  depreciation expense                                                                   |   | $                                         | 20,434 |   | $ | 2,524 |   | $ | 16,731 |   |
|                                                                                                                 |   |                                      |   |   |   |   |   |   |   |   |
| **Amortization                  of intangible assets and purchase price allocated to inventory                  *:** |   |                                      |   |   |   |   |   |   |   |   |
| Residential                  building products                                                                       |   | $                                         | 11,137 |   | $ | 2,953 |   | $ | 6,879 |   |
| Air                  conditioning and heating products                                                               |   |                                      | 2,397  |   |   | 782 |   |   | 2,213 |   |
| Other                                                                                                                |   |                                      | 375    |   |   | 48 |   |   | --- |   |
| Consolidated                    amortization expense and purchase                    price allocated to inventory    |   | $                                         | 13,909 |   | $ | 3,783 |   | $ | 9,092 |   |
|                                                                                                                 |   |                                      |   |   |   |   |   |   |   |   |
| **Capital                  Expenditures **:**                                                                        |   |                                      |   |   |   |   |   |   |   |   |
| Residential                  building products                                                                       |   | $                                         | 7,171  |   | $ | 679 |   | $ | 6,956 |   |
| Air                  conditioning and heating products                                                               |   |                                      | 11,993 |   |   | 2,208 |   |   | 5,483 |   |
| Other                                                                                                                |   |                                      | 451    |   |   | --- |   |   | 347 |   |
| Consolidated                  capital expenditures                                                                   |   | $                                         | 19,615 |   | $ | 2,887 |   | $ | 12,786 |   |

|   | * | During                the nine months ended October 2, 2005 and the periods from August                28, 2004                to October 2, 2004 and from January 1, 2004 to August 27, 2004 the                Company                reflected amortization of approximately $800,000, $1,900,000 and                $200,000,                respectively, in the Residential Building Products Segment and for                the                period from August 28, 2004 to October 2, 2004 approximately $500,000                in                the Air Conditioning and Heating Products Segment of excess purchase                price                allocated to inventory as a non-cash charge to cost of products                sold. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ** | Includes                capital expenditures financed under capital leases of approximately                $4,600,000, $300,000 and $900,000 for the nine months ended October                1,                2005 and the periods from August 28, 2004 to October 2, 2004 and                from                January 1, 2004 to August 27, 2004, respectively. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (H) | The                Company provides income taxes on an interim basis based upon the                estimated                annual effective income tax rate. The following reconciles the federal                statutory income tax rate to the estimated effective tax rate of                approximately 38.4%, 42.9% and 27.1% for the periods                presented: |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                          |   | **For                the Periods** |
|---------------------------------------------------------------------------------------------------------------|--------|------------------------------------|
|                                                                                                          |   | **Post-Acquisition**               | **Pre-Acquisition** |
|                                                                                                          |   | **Jan.                1, 2005 -**  | **Aug.                28, 2004 -** | **Jan.                1, 2004 -** |
|                                                                                                          |   | **Oct.                1, 2005**    | **Oct.                2, 2004** | **Aug.                27, 2004** |
| Income                tax provision (benefit) at the federal statutory rate                                   |   |                               | 35.0 | % |   | (35.0 | )% |   | (35.0 | )% |
| Net                change from federal statutory rate:                                                        |   |                               |   |   |   |   |   |   |   |   |
|                    State income tax provision, net of federal income tax                effect |   |                               | 2.3 |   |   | (1.7 | ) |   | 0.5 |   |
|                    Tax effect resulting from foreign activities                                |   |                               | 0.8 |   |   | (8.1 | ) |   | 1.2 |   |
| Non-deductible                expenses                                                                        |   |                               | 0.3 |   |   | (0.6 | ) |   | 0.2 |   |
| Tax                effect of the Acquisition                                                                  |   |                               | --- |   |   | --- |   |   | 6.0 |   |
| Other,                net                                                                                     |   |                               | --- |   |   | 2.5 |   |   | --- |   |
| Income                tax provision (benefit) at estimated effective rate                                     |   |                               | 38.4 | % |   | (42.9 | )% |   | (27.1 | )% |

| (I) | As                of October 1, 2005, the Company’s former subsidiary, Ply Gem, has                guaranteed approximately $24,100,000 of third party obligations relating                to rental payments through June 30, 2016 under a facility leased                by a                former subsidiary, which was sold on September 21, 2001. The Company                has                indemnified these guarantees in connection with the sale of Ply Gem                on                February 12, 2004 (see Note F) and has recorded an estimated liability                related to this indemnified guarantee of approximately $1,000,000                at                October 1, 2005 in accordance with Interpretation No. 45, “Guarantor’s                Accounting and Disclosure Requirements for Guarantees, Including                Indirect                Guarantees of Indebtedness of Others” (“FIN 45”). The buyer of the former                subsidiary has provided certain indemnifications and other rights                to                Nortek for any payments that it might be required to make pursuant                to this                guarantee. Should the buyer of the former subsidiary cease making                payments                then the Company may be required to make payments on its                indemnification. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                   |   | **For                  the Periods**      |   |
|------------------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                                   |   | **Post-Acquisition**                      |   | **Pre-Acquisition** |   |
|                                                                   |   | **Jul.                  3, 2005 -**       |   | **Aug.                  28, 2004 -** |   | **Jul.                  4, 2004 -** |   |
|                                                                   |   | **Oct.                  1, 2005**         |   | **Oct.                  2, 2004** |   | **Aug.                  27, 2004** |   |
|                                                                   |   | *(Amounts                  in thousands)* |   |
|                                                                   |   |                                      |   |   |   |   |   |
| Balance,                  beginning of period                          |   | $                                         | 31,961 |   | $ | 29,683 |   | $ | 30,416 |   |
| Warranties                  provided during the period                 |   |                                      | 5,853  |   |   | 1,495 |   |   | 2,175 |   |
| Settlements                  made during the period                    |   |                                      | (5,670 | ) |   | (1,704 | ) |   | (3,049 | ) |
| Changes                  in liability estimate, including acquisitions |   |                                      | 307    |   |   | 235 |   |   | 141 |   |
| Balance,                  end of period                                |   | $                                         | 32,451 |   | $ | 29,709 |   | $ | 29,683 |   |

|                                                                   |   | **For                  the Periods**      |    |
|------------------------------------------------------------------------|--------|-------------------------------------------|---------|
|                                                                   |   | **Post-Acquisition**                      |    | **Pre-Acquisition** |   |
|                                                                   |   | **Jan.                  1, 2005 -**       |    | **Aug.                  28, 2004 -** |   | **Jan.                  1, 2004 -** |   |
|                                                                   |   | **Oct.                  1, 2005**         |    | **Oct.                  2, 2004** |   | **Aug.                  27, 2004** |   |
|                                                                   |   | *(Amounts                  in thousands)* |    |
|                                                                   |   |                                      |    |   |   |   |   |
| Balance,                  beginning of period                          |   | $                                         | 30,319  |   | $ | 29,683 |   | $ | 29,087 |   |
| Warranties                  provided during the period                 |   |                                      | 16,257  |   |   | 1,495 |   |   | 11,437 |   |
| Settlements                  made during the period                    |   |                                      | (14,791 | ) |   | (1,704 | ) |   | (10,877 | ) |
| Changes                  in liability estimate, including acquisitions |   |                                      | 666     |   |   | 235 |   |   | 36 |   |
| Balance,                  end of period                                |   | $                                         | 32,451  |   | $ | 29,709 |   | $ | 29,683 |   |

| (J) | The                Company records restructuring costs primarily in connection with                operations acquired or facility closings which management plans to                eliminate in order to improve future operating results of the                Company. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            |   | **Employee                Separation****Expenses** |      |   **Other** |   | **Total****Restructuring****Costs** |   |
|-------------------------------------------------|--------|----------------------------------------------------|-----------|-----------------------|--------|-------------------------------------|--------|
|                                            |   | *(Amounts                in thousands)*            |      |
|                                            |   | *(Unaudited)*                                      |      |
|                                            |   |                                               |      |                  |   |                                |   |
| **Balance                at December 31, 2003** |   | **$**                                              | **1,638** |                  | **$**  | **205**                             |   | **$** | **1,843** |   |
| Provision                                       |   |                                               | 71        |                  |   | 1,219                               |   |   | 1,290 |   |
| Payments                                        |   |                                               | (1,139    | )                     |   | (1,420                              | )      |   | (2,559 | ) |
| **Balance                at April 3, 2004**     |   |                                               | **570**   |                  |   | **4**                               |   |   | **574** |   |
| Provision                                       |   |                                               | 125       |                  |   | 458                                 |   |   | 583 |   |
| Payments                                        |   |                                               | (202      | )                     |   | (462                                | )      |   | (664 | ) |
| **Balance                at July 3, 2004**      |   |                                               | **493**   |                  |   | **---**                             |   |   | **493** |   |
| Provision                                       |   |                                               | 3,351     |                  |   | 311                                 |   |   | 3,662 |   |
| Payments                                        |   |                                               | (14       | )                     |   | (167                                | )      |   | (181 | ) |
| **Balance                at August 27, 2004**   |   |                                               | **3,830** |                  |   | **144**                             |   |   | **3,974** |   |
| Provision                                       |   |                                               | ---       |                  |   | 329                                 |   |   | 329 |   |
| Payments                                        |   |                                               | (21       | )                     |   | (398                                | )      |   | (419 | ) |
| **Balance                at October 2, 2004**   |   | **$**                                              | **3,809** |                  | **$**  | **75**                              |   | **$** | **3,884** |   |
|                                            |   |                                               |      |                  |   |                                |   |   |   |   |
| **Balance                at December 31, 2004** |   | **$**                                              | **3,150** |                  | **$**  | **30**                              |   | **$** | **3,180** |   |
| Payments                                        |   |                                               | (454      | )                     |   | (30                                 | )      |   | (484 | ) |
| Other                                           |   |                                               | (10       | )                     |   | ---                                 |   |   | (10 | ) |
| **Balance                at April 2, 2005**     |   |                                               | **2,686** |                  |   | **---**                             |   |   | **2,686** |   |
| Payments                                        |   |                                               | (380      | )                     |   | ---                                 |   |   | (380 | ) |
| **Balance                at July 2, 2005**      |   |                                               | **2,306** |                  |   | **---**                             |   |   | **2,306** |   |
| Payments                                        |   |                                               | (772      | )                     |   | ---                                 |   |   | (772 | ) |
| **Balance                at October 1, 2005**   |   | **$**                                              | **1,534** |                  | **$**  | **---**                             |   | **$** | **1,534** |   |
|                                            |   |                                               |      |                  |   |                                |   |   |   |   |

|                                                  |   | **For                    the Periods**      |   |
|-------------------------------------------------------|--------|---------------------------------------------|--------|
|                                                  |   | **Post-Acquisition**                        |   | **Pre-Acquisition** |   |
|                                                  |   | **Jul.                    3, 2005 -**       |   | **Aug.                    28, 2004 -** |   | **Jul.                    4, 2004 -** |   |
|                                                  |   | **Oct.                    1, 2005**         |   | **Oct.                    2, 2004** |   | **Aug.                    27, 2004** |   |
|                                                  |   | *(Amounts                    in thousands)* |   |
|                                                  |   |                                        |   |   |   |   |   |
| Service                    cost                       |   | $                                           | 336    |   | $ | 95 |   | $ | 177 |   |
| Interest                    cost                      |   |                                        | 2,213  |   |   | 684 |   |   | 1,399 |   |
| Expected                    return on plan assets     |   |                                        | (2,106 | ) |   | (648 | ) |   | (1,208 | ) |
| Amortization                    of prior service cost |   |                                        | ---    |   |   | --- |   |   | 28 |   |
| Recognized                    actuarial loss          |   |                                        | 5      |   |   | --- |   |   | 2 |   |
| Curtailment                    loss                   |   |                                        | ---    |   |   | --- |   |   | 806 |   |
| Net                    periodic benefit cost          |   | $                                           | 448    |   | $ | 131 |   | $ | 1,204 |   |

|                                                |   | **For                  the Periods**      |   |
|-----------------------------------------------------|--------|-------------------------------------------|--------|
|                                                |   | **Post-Acquisition**                      |   | **Pre-Acquisition** |   |
|                                                |   | **Jan.                  1, 2005 -**       |   | **Aug.                  28, 2004 -** |   | **Jan.                  1, 2004 -** |   |
|                                                |   | **Oct.                  1, 2005**         |   | **Oct.                  2, 2004** |   | **Aug.                  27, 2004** |   |
|                                                |   | *(Amounts                  in thousands)* |   |
|                                                |   |                                      |   |   |   |   |   |
| Service                  cost                       |   | $                                         | 1,011  |   | $ | 95 |   | $ | 772 |   |
| Interest                  cost                      |   |                                      | 6,693  |   |   | 684 |   |   | 6,106 |   |
| Expected                  return on plan assets     |   |                                      | (6,364 | ) |   | (648 | ) |   | (5,271 | ) |
| Amortization                  of prior service cost |   |                                      | ---    |   |   | --- |   |   | 124 |   |
| Recognized                  actuarial loss          |   |                                      | 15     |   |   | --- |   |   | 10 |   |
| Curtailment                  loss                   |   |                                      | ---    |   |   | --- |   |   | 806 |   |
| Net                  periodic benefit cost          |   | $                                         | 1,355  |   | $ | 131 |   | $ | 2,547 |   |

|                                                            |   | **For                the Periods**      |   |
|-----------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                            |   | **Post-Acquisition**                    |   | **Pre-Acquisition** |   |
|                                                            |   | **Jul.                3, 2005 -**       |   | **Aug.                28, 2004 -** |   | **Jul.                4, 2004 -** |   |
|                                                            |   | **Oct.                1, 2005**         |   | **Oct.                2, 2004** |   | **Aug.                27, 2004** |   |
|                                                            |   | *(Amounts                in thousands)* |   |
|                                                            |   |                                    |   |   |   |   |   |
| Service                cost                                     |   | $                                       | 111    |   | $ | 36 |   | $ | 149 |   |
| Interest                cost                                    |   |                                    | 613    |   |   | 206 |   |   | 368 |   |
| Recognized                actuarial gain                        |   |                                    | ---    |   |   | --- |   |   | (3 | ) |
| Net                periodic post retirement health benefit cost |   | $                                       | 724    |   | $ | 242 |   | $ | 514 |   |

|                                                            |   | **For                the Periods**      |   |
|-----------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                            |   | **Post-Acquisition**                    |   | **Pre-Acquisition** |   |
|                                                            |   | **Jan.                1, 2005 -**       |   | **Aug.                28, 2004 -** |   | **Jan.                1, 2004 -** |   |
|                                                            |   | **Oct.                1, 2005**         |   | **Oct.                2, 2004** |   | **Aug.                27, 2004** |   |
|                                                            |   | *(Amounts                in thousands)* |   |
|                                                            |   |                                    |   |   |   |   |   |
| Service                cost                                     |   | $                                       | 333    |   | $ | 36 |   | $ | 650 |   |
| Interest                cost                                    |   |                                    | 1,844  |   |   | 206 |   |   | 1,604 |   |
| Recognized                actuarial gain                        |   |                                    | ---    |   |   | --- |   |   | (14 | ) |
| Net                periodic post retirement health benefit cost |   | $                                       | 2,177  |   | $ | 242 |   | $ | 2,240 |   |

| (L) | The                Company’s 8 1/2% Senior Subordinated Notes due 2014 (the “8 1/2% Notes”)                require interest to be paid semi-annually in arrears on March 1 and                September 1 of each year. The 8 1/2% Notes are guaranteed by all                of the                Company’s current and certain future domestic subsidiaries, as defined,                with the exception of certain domestic subsidiaries, as defined,                which are                excluded from the 8 1/2% Note guarantee (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 8 1/2% Notes.                None of the Company’s subsidiaries organized outside of the United States                guarantee the 8 1/2% Notes. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Unaudited      Condensed Consolidating Balance Sheet as of October 1,      2005**

|                                                                                                             |   |                                      |      | **Guarantor**    |   | **Non-Guarantor** |   |             |    | **Nortek**       |   |
|------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|-----------|------------------|--------|-------------------|--------|------------------|---------|------------------|--------|
|                                                                                                             |   | **Parent**                                |      | **Subsidiaries** |   | **Subsidiaries**  |   | **Eliminations** |    | **Consolidated** |   |
|                                                                                                             |   | *(Amounts                  in thousands)* |      |
| **ASSETS:**                                                                                                      |   |                                      |      |             |   |              |   |             |    |             |   |
| **Current                  Assets:**                                                                             |   |                                      |      |             |   |              |   |             |    |             |   |
| Unrestricted                  cash and cash equivalents                                                          |   | $                                         | 17,650    |             | $      | 5,202             |   | $                | 24,137  |             | $      | --- |   | $ | 46,989 |   |
| Restricted                  cash and cash equivalents                                                            |   |                                      | ---       |             |   | 2,271             |   |             | ---     |             |   | --- |   |   | 2,271 |   |
| Accounts                  receivable, less allowances                                                            |   |                                      | ---       |             |   | 225,706           |   |             | 70,911  |             |   | --- |   |   | 296,617 |   |
| Intercompany                  receivables (payables)                                                             |   |                                      | ---       |             |   | 3,814             |   |             | (3,814  | )                |   | --- |   |   | --- |   |
| Inventories                                                                                                      |   |                                      | ---       |             |   | 179,787           |   |             | 45,633  |             |   | --- |   |   | 225,420 |   |
| Prepaid                  expenses                                                                                |   |                                      | 788       |             |   | 7,249             |   |             | 3,164   |             |   | --- |   |   | 11,201 |   |
| Other                  current assets                                                                            |   |                                      | 2,970     |             |   | 3,119             |   |             | 21,194  |             |   | --- |   |   | 27,283 |   |
| Prepaid                  income taxes                                                                            |   |                                      | 14,455    |             |   | 14,939            |   |             | 400     |             |   | --- |   |   | 29,794 |   |
|                      Total current assets                                                         |   |                                      | 35,863    |             |   | 442,087           |   |             | 161,625 |             |   | --- |   |   | 639,575 |   |
| **Property                  and Equipment, at Cost:**                                                            |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| Total                  property and equipment, net                                                               |   |                                      | 1,861     |             |   | 138,743           |   |             | 56,457  |             |   | --- |   |   | 197,061 |   |
| **Other                  Long-term Assets:**                                                                     |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| Investment                    in subsidiaries and long-term receivable                    from (to) subsidiaries |   |                                      | 1,773,642 |             |   | (45,970           | )      |             | (59,644 | )                |   | (1,668,028 | ) |   | --- |   |
| Goodwill                                                                                                         |   |                                      | ---       |             |   | 1,357,657         |   |             | 26,191  |             |   | --- |   |   | 1,383,848 |   |
| Intangible                  assets, less accumulated amortization                                                |   |                                      | 1,279     |             |   | 77,273            |   |             | 20,760  |             |   | --- |   |   | 99,312 |   |
| Long-term                  portion of receivable from affiliate                                                  |   |                                      | 16,893    |             |   | ---               |   |             | ---     |             |   | --- |   |   | 16,893 |   |
| Other                  assets                                                                                    |   |                                      | 44,426    |             |   | 3,802             |   |             | 2,079   |             |   | --- |   |   | 50,307 |   |
|                      Total other long-term assets                                                 |   |                                      | 1,836,240 |             |   | 1,392,762         |   |             | (10,614 | )                |   | (1,668,028 | ) |   | 1,550,360 |   |
|                      Total assets                                                                 |   | $                                         | 1,873,964 |             | $      | 1,973,592         |   | $                | 207,468 |             | $      | (1,668,028 | ) | $ | 2,386,996 |   |
|                                                                                                             |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| **LIABILITIES                    AND STOCKHOLDER'S INVESTMENT:**                                                 |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| **Current                  Liabilities:**                                                                        |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| Notes                  payable and other short-term obligations                                                  |   | $                                         | ---       |             | $      | ---               |   | $                | 6,894   |             | $      | --- |   | $ | 6,894 |   |
| Current                  maturities of long-term debt                                                            |   |                                      | 8,553     |             |   | 1,933             |   |             | 805     |             |   | --- |   |   | 11,291 |   |
| Accounts                  payable                                                                                |   |                                      | 812       |             |   | 102,832           |   |             | 67,585  |             |   | --- |   |   | 171,229 |   |
| Accrued                  expenses and taxes, net                                                                 |   |                                      | 10,416    |             |   | 129,045           |   |             | 32,850  |             |   | --- |   |   | 172,311 |   |
|                      Total current liabilities                                                    |   |                                      | 19,781    |             |   | 233,810           |   |             | 108,134 |             |   | --- |   |   | 361,725 |   |
| **Other                  Liabilities:**                                                                          |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| Deferred                  income taxes                                                                           |   |                                      | (15,134   | )                |   | 26,881            |   |             | 15,900  |             |   | --- |   |   | 27,647 |   |
| Other                  long-term liabilities                                                                     |   |                                      | 69,725    |             |   | 83,879            |   |             | 9,776   |             |   | --- |   |   | 163,380 |   |
|                                                                                                             |   |                                      | 54,591    |             |   | 110,760           |   |             | 25,676  |             |   | --- |   |   | 191,027 |   |
| **Notes,                    Mortgage Notes and Obligations Payable,                    Less Current Maturities** |   |                                      | 1,323,233 |             |   | 32,772            |   |             | 1,880   |             |   | --- |   |   | 1,357,885 |   |
|                                                                                                             |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| Stockholder's                  investment                                                                        |   |                                      | 476,359   |             |   | 1,596,250         |   |             | 71,778  |             |   | (1,668,028 | ) |   | 476,359 |   |
|                      Total liabilities and stockholder's investment                               |   | $                                         | 1,873,964 |             | $      | 1,973,592         |   | $                | 207,468 |             | $      | (1,668,028 | ) | $ | 2,386,996 |   |

**Unaudited      Condensed Consolidating Balance Sheet as of December 31,      2004**

|                                                                                                             |   |                                      |      | **Guarantor**    |   | **Non-Guarantor** |   |             |    | **Nortek**       |   |
|------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|-----------|------------------|--------|-------------------|--------|------------------|---------|------------------|--------|
|                                                                                                             |   | **Parent**                                |      | **Subsidiaries** |   | **Subsidiaries**  |   | **Eliminations** |    | **Consolidated** |   |
|                                                                                                             |   | *(Amounts                  in thousands)* |      |
| **ASSETS:**                                                                                                      |   |                                      |      |             |   |              |   |             |    |             |   |
| **Current                  Assets:**                                                                             |   |                                      |      |             |   |              |   |             |    |             |   |
| Cash                  and cash equivalents                                                                       |   | $                                         | 76,562    |             | $      | 2,313             |   | $                | 16,080  |             | $      | --- |   | $ | 94,955 |   |
| Accounts                  receivable, less allowances                                                            |   |                                      | ---       |             |   | 158,688           |   |             | 67,018  |             |   | --- |   |   | 225,706 |   |
| Intercompany                  receivables (payables)                                                             |   |                                      | ---       |             |   | 2,141             |   |             | (2,141  | )                |   | --- |   |   | --- |   |
| Inventories                                                                                                      |   |                                      | ---       |             |   | 166,748           |   |             | 38,801  |             |   | --- |   |   | 205,549 |   |
| Prepaid                  expenses                                                                                |   |                                      | (37       | )                |   | 6,820             |   |             | 1,813   |             |   | --- |   |   | 8,596 |   |
| Other                  current assets                                                                            |   |                                      | 5,510     |             |   | 4,515             |   |             | 16,101  |             |   | --- |   |   | 26,126 |   |
| Prepaid                  income taxes                                                                            |   |                                      | 20,100    |             |   | 14,163            |   |             | 400     |             |   | --- |   |   | 34,663 |   |
| Current                  portion of receivable from affiliate                                                    |   |                                      | 17,220    |             |   | ---               |   |             | ---     |             |   | --- |   |   | 17,220 |   |
|                      Total current assets                                                         |   |                                      | 119,355   |             |   | 355,388           |   |             | 138,072 |             |   | --- |   |   | 612,815 |   |
| **Property                  and Equipment, at Cost:**                                                            |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| Total                  property and equipment, net                                                               |   |                                      | 1,900     |             |   | 139,382           |   |             | 59,808  |             |   | --- |   |   | 201,090 |   |
| **Other                  Long-term Assets:**                                                                     |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| Investment                    in subsidiaries and long-term receivable                    from (to) subsidiaries |   |                                      | 1,659,827 |             |   | (42,000           | )      |             | (52,332 | )                |   | (1,565,495 | ) |   | --- |   |
| Goodwill                                                                                                         |   |                                      | ---       |             |   | 1,273,321         |   |             | 21,784  |             |   | --- |   |   | 1,295,105 |   |
| Intangible                  assets, less accumulated amortization                                                |   |                                      | 1,654     |             |   | 85,233            |   |             | 23,828  |             |   | --- |   |   | 110,715 |   |
| Long-term                  portion of receivable from affiliate                                                  |   |                                      | 16,088    |             |   | ---               |   |             | ---     |             |   | --- |   |   | 16,088 |   |
| Other                  assets                                                                                    |   |                                      | 48,183    |             |   | 12,818            |   |             | 499     |             |   | --- |   |   | 61,500 |   |
|                      Total other long-term assets                                                 |   |                                      | 1,725,752 |             |   | 1,329,372         |   |             | (6,221  | )                |   | (1,565,495 | ) |   | 1,483,408 |   |
|                      Total assets                                                                 |   | $                                         | 1,847,007 |             | $      | 1,824,142         |   | $                | 191,659 |             | $      | (1,565,495 | ) | $ | 2,297,313 |   |
|                                                                                                             |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| **LIABILITIES                    AND STOCKHOLDER'S INVESTMENT:**                                                 |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| **Current                  Liabilities:**                                                                        |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| Notes                  payable and other short-term obligations                                                  |   | $                                         | ---       |             | $      | ---               |   | $                | 5,364   |             | $      | --- |   | $ | 5,364 |   |
| Current                  maturities of long-term debt                                                            |   |                                      | 11,550    |             |   | 1,867             |   |             | 997     |             |   | --- |   |   | 14,414 |   |
| Accounts                  payable                                                                                |   |                                      | 1,229     |             |   | 76,270            |   |             | 59,844  |             |   | --- |   |   | 137,343 |   |
| Accrued                  expenses and taxes, net                                                                 |   |                                      | 28,026    |             |   | 104,606           |   |             | 38,959  |             |   | --- |   |   | 171,591 |   |
|                      Total current liabilities                                                    |   |                                      | 40,805    |             |   | 182,743           |   |             | 105,164 |             |   | --- |   |   | 328,712 |   |
| **Other                  Liabilities:**                                                                          |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| (Prepaid)                  deferred income taxes                                                                 |   |                                      | (10,600   | )                |   | 27,437            |   |             | 15,900  |             |   | --- |   |   | 32,737 |   |
| Other                  long-term liabilities                                                                     |   |                                      | 73,620    |             |   | 84,590            |   |             | 10,498  |             |   | --- |   |   | 168,708 |   |
|                                                                                                             |   |                                      | 63,020    |             |   | 112,027           |   |             | 26,398  |             |   | --- |   |   | 201,445 |   |
|                                                                                                             |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| **Notes,                    Mortgage Notes and Obligations Payable,                    Less Current Maturities** |   |                                      | 1,326,236 |             |   | 23,738            |   |             | 236     |             |   | --- |   |   | 1,350,210 |   |
|                                                                                                             |   |                                      |      |             |   |              |   |             |    |             |   |   |   |   |   |   |
| Stockholder's                  investment                                                                        |   |                                      | 416,946   |             |   | 1,505,634         |   |             | 59,861  |             |   | (1,565,495 | ) |   | 416,946 |   |
|                      Total liabilities and stockholder's investment                               |   | $                                         | 1,847,007 |             | $      | 1,824,142         |   | $                | 191,659 |             | $      | (1,565,495 | ) | $ | 2,297,313 |   |

**Unaudited      Condensed Consolidating Statement of Operations**

**For      the three months ended October 1, 2005**

** **

|                                                                                                                 |   |                                        |    | **Guarantor**    |   | **Non-Guarantor** |   |             |    | **Nortek**       |   |
|----------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|---------|------------------|--------|-------------------|--------|------------------|---------|------------------|--------|
|                                                                                                                 |   | **Parent**                                  |    | **Subsidiaries** |   | **Subsidiaries**  |   | **Eliminations** |    | **Consolidated** |   |
|                                                                                                                 |   | *(Amounts                    in thousands)* |    |
|                                                                                                                 |   |                                        |    |             |   |              |   |             |    |             |   |
| **Net                    Sales**                                                                                     |   | $                                           | ---     |             | $      | 435,211           |   | $                | 112,911 |             | $      | (25,256 | ) | $ | 522,866 |   |
|                                                                                                                 |   |                                        |    |             |   |              |   |             |    |             |   |   |   |   |   |   |
| **Costs                    and expenses:**                                                                           |   |                                        |    |             |   |              |   |             |    |             |   |   |   |   |   |   |
|                       Costs of products sold                                                               |   |                                        | ---     |             |   | 296,853           |   |             | 89,671  |             |   | (25,256 | ) |   | 361,268 |   |
|                       Selling, general and administrative expenses                                         |   |                                        | 5,820   |             |   | 69,332            |   |             | 14,475  |             |   | --- |   |   | 89,627 |   |
|                       Amortization of intangible assets                                                    |   |                                        | 126     |             |   | 3,742             |   |             | 523     |             |   | --- |   |   | 4,391 |   |
|                                                                                                                 |   |                                        | 5,946   |             |   | 369,927           |   |             | 104,669 |             |   | (25,256 | ) |   | 455,286 |   |
| Operating                    (loss) earnings                                                                         |   |                                        | (5,946  | )                |   | 65,284            |   |             | 8,242   |             |   | --- |   |   | 67,580 |   |
| Interest                    expense                                                                                  |   |                                        | (25,750 | )                |   | (560              | )      |             | (234    | )                |   | --- |   |   | (26,544 | ) |
| Investment                    income                                                                                 |   |                                        | 203     |             |   | 5                 |   |             | 56      |             |   | --- |   |   | 264 |   |
| (Loss)                    income before charges and allocations to subsidiaries and                                  |   |                                        |    |             |   |              |   |             |    |             |   |   |   |   |   |   |
|                        equity (loss) in subsidiaries' earnings before income                    taxes |   |                                        | (31,493 | )                |   | 64,729            |   |             | 8,064   |             |   | --- |   |   | 41,300 |   |
| Charges                    and allocations to subsidiaries and equity (loss) in subsidiaries'                        |   |                                        |    |             |   |              |   |             |    |             |   |   |   |   |   |   |
|                        earnings before income taxes                                                   |   |                                        | 72,793  |             |   | (12,729           | )      |             | 36      |             |   | (60,100 | ) |   | --- |   |
| Earnings                    (loss) from continuing operations before                                                 |   |                                        |    |             |   |              |   |             |    |             |   |   |   |   |   |   |
|                        provision (benefit) for income taxes                                           |   |                                        | 41,300  |             |   | 52,000            |   |             | 8,100   |             |   | (60,100 | ) |   | 41,300 |   |
| Provision                    (benefit) for income taxes                                                              |   |                                        | 16,300  |             |   | 19,800            |   |             | 3,200   |             |   | (23,000 | ) |   | 16,300 |   |
|                        Net earnings (loss)                                                            |   | $                                           | 25,000  |             | $      | 32,200            |   | $                | 4,900   |             | $      | (37,100 | ) | $ | 25,000 |   |

**Unaudited      Condensed Consolidating Statement of Operations**

**For      the period from August 28, 2004 to October 2, 2004**

|                                                                                                                   |   |                                      |    | **Guarantor**    |   | **Non-Guarantor** |   |             |   | **Nortek**       |   |
|------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|---------|------------------|--------|-------------------|--------|------------------|--------|------------------|--------|
|                                                                                                                   |   | **Parent**                                |    | **Subsidiaries** |   | **Subsidiaries**  |   | **Eliminations** |   | **Consolidated** |   |
|                                                                                                                   |   | *(Amounts                  in thousands)* |    |
|                                                                                                                   |   |                                      |    |             |   |              |   |             |   |             |   |
| **Net                  Sales**                                                                                         |   | $                                         | ---     |             | $      | 127,657           |   | $                | 43,794 |             | $      | (10,423 | ) | $ | 161,028 |   |
|                                                                                                                   |   |                                      |    |             |   |              |   |             |   |             |   |   |   |   |   |   |
| **Costs                  and expenses:**                                                                               |   |                                      |    |             |   |              |   |             |   |             |   |   |   |   |   |   |
|                      Costs of products sold                                                             |   |                                      | ---     |             |   | 90,966            |   |             | 35,349 |             |   | (10,423 | ) |   | 115,892 |   |
|                      Selling, general and administrative expenses                                       |   |                                      | 2,155   |             |   | 20,679            |   |             | 5,433  |             |   | --- |   |   | 28,267 |   |
|                      Amortization of intangible assets                                                  |   |                                      | 48      |             |   | 1,162             |   |             | 194    |             |   | --- |   |   | 1,404 |   |
|                                                                                                                   |   |                                      | 2,203   |             |   | 112,807           |   |             | 40,976 |             |   | (10,423 | ) |   | 145,563 |   |
| Operating                  (loss) earnings                                                                             |   |                                      | (2,203  | )                |   | 14,850            |   |             | 2,818  |             |   | --- |   |   | 15,465 |   |
| Interest                  expense                                                                                      |   |                                      | (16,005 | )                |   | (135              | )      |             | (57    | )                |   | --- |   |   | (16,197 | ) |
| Investment                  income                                                                                     |   |                                      | 12      |             |   | 1                 |   |             | 19     |             |   | --- |   |   | 32 |   |
| (Loss)                    income before charges and allocations to subsidiaries and                                    |   |                                      |    |             |   |              |   |             |   |             |   |   |   |   |   |   |
|                      equity (loss) in subsidiaries' earnings before income                  taxes       |   |                                      | (18,196 | )                |   | 14,716            |   |             | 2,780  |             |   | --- |   |   | (700 | ) |
| Charges                    and allocations to subsidiaries and  equity                    (loss) in subsidiaries' |   |                                      |    |             |   |              |   |             |   |             |   |   |   |   |   |   |
|                      earnings before income taxes                                                       |   |                                      | 17,496  |             |   | (3,516            | )      |             | 20     |             |   | (14,000 | ) |   | --- |   |
| (Loss)                  earnings from continuing operations                                                            |   |                                      |    |             |   |              |   |             |   |             |   |   |   |   |   |   |
|                      before (benefit) provision for income taxes                                        |   |                                      | (700    | )                |   | 11,200            |   |             | 2,800  |             |   | (14,000 | ) |   | (700 | ) |
| (Benefit)                  provision for income taxes                                                                  |   |                                      | (300    | )                |   | 4,300             |   |             | 1,000  |             |   | (5,300 | ) |   | (300 | ) |
|                      Net (loss) earnings                                                                |   | $                                         | (400    | )                | $      | 6,900             |   | $                | 1,800  |             | $      | (8,700 | ) | $ | (400 | ) |

**Unaudited      Condensed Consolidating Statement of Operations**

**For      the period from July 4, 2004 to August 27, 2004**

|                                                                                            |   |                                      |     | **Guarantor**    |   | **Non-Guarantor** |   | **Discontinued** |   |             |   | **Nortek**       |   |
|-------------------------------------------------------------------------------------------------|--------|-------------------------------------------|----------|------------------|--------|-------------------|--------|------------------|--------|------------------|--------|------------------|--------|
|                                                                                            |   | **Parent**                                |     | **Subsidiaries** |   | **Subsidiaries**  |   | **Operations**   |   | **Eliminations** |   | **Consolidated** |   |
|                                                                                            |   | *(Amounts                  in thousands)* |     |
|                                                                                            |   |                                      |     |             |   |              |   |             |   |             |   |             |   |
| **Net                  Sales**                                                                  |   | $                                         | ---      |             | $      | 218,759           |   | $                | 62,866 |             | $      | ---              |   | $ | (14,789 | ) | $ | 266,836 |   |
|                                                                                            |   |                                      |     |             |   |              |   |             |   |             |   |             |   |   |   |   |   |   |   |
| **Costs                  and expenses:**                                                        |   |                                      |     |             |   |              |   |             |   |             |   |             |   |   |   |   |   |   |   |
|                     Costs of products sold                                            |   |                                      | ---      |             |   | 156,228           |   |             | 49,634 |             |   | ---              |   |   | (14,789 | ) |   | 191,073 |   |
|                       Selling, general and administrative expenses                    |   |                                      | 4,213    |             |   | 32,900            |   |             | 8,901  |             |   | ---              |   |   | --- |   |   | 46,014 |   |
|                     Amortization of intangible assets                                 |   |                                      | ---      |             |   | 1,724             |   |             | 296    |             |   | ---              |   |   | --- |   |   | 2,020 |   |
|                     Expenses and charges arising                                      |   |                                      |     |             |   |              |   |             |   |             |   |             |   |   |   |   |   |   |   |
|                         from the Acquisition                      |   |                                      | 72,600   |             |   | 10,000            |   |             | 1,100  |             |   | ---              |   |   | --- |   |   | 83,700 |   |
|                                                                                            |   |                                      | 76,813   |             |   | 200,852           |   |             | 59,931 |             |   | ---              |   |   | (14,789 | ) |   | 322,807 |   |
| Operating                  (loss) earnings                                                      |   |                                      | (76,813  | )                |   | 17,907            |   |             | 2,935  |             |   | ---              |   |   | --- |   |   | (55,971 | ) |
| Interest                  expense                                                               |   |                                      | (11,674  | )                |   | (286              | )      |             | (132   | )                |   | ---              |   |   | --- |   |   | (12,092 | ) |
| Loss                  from debt retirement                                                      |   |                                      | (118,778 | )                |   | ---               |   |             | ---    |             |   | ---              |   |   | --- |   |   | (118,778 | ) |
| Investment                  income                                                              |   |                                      | 219      |             |   | (1                | )      |             | 23     |             |   | ---              |   |   | --- |   |   | 241 |   |
| (Loss)                  income before charges and allocations to                                |   |                                      |     |             |   |              |   |             |   |             |   |             |   |   |   |   |   |   |   |
|                      subsidiaries and equity (loss) in subsidiaries'             |   |                                      |     |             |   |              |   |             |   |             |   |             |   |   |   |   |   |   |   |
|                      earnings before income taxes                                |   |                                      | (207,046 | )                |   | 17,620            |   |             | 2,826  |             |   | ---              |   |   | --- |   |   | (186,600 | ) |
| Charges                    and allocations to subsidiaries and                    equity (loss) |   |                                      |     |             |   |              |   |             |   |             |   |             |   |   |   |   |   |   |   |
|                      in subsidiaries' earnings equity (loss) in subsidiaries'    |   |                                      |     |             |   |              |   |             |   |             |   |             |   |   |   |   |   |   |   |
|                      earnings before income taxes                                |   |                                      | 20,446   |             |   | (6,520            | )      |             | 74     |             |   | ---              |   |   | (14,000 | ) |   | --- |   |
| (Loss)                    earnings from continuing operations                    before         |   |                                      |     |             |   |              |   |             |   |             |   |             |   |   |   |   |   |   |   |
|                      (benefit) provision for income taxes                        |   |                                      | (186,600 | )                |   | 11,100            |   |             | 2,900  |             |   | ---              |   |   | (14,000 | ) |   | (186,600 | ) |
| (Benefit)                  provision for income taxes                                           |   |                                      | (55,200  | )                |   | 4,400             |   |             | 1,900  |             |   | ---              |   |   | (6,300 | ) |   | (55,200 | ) |
| (Loss)                  earnings from continuing operations                                     |   |                                      | (131,400 | )                |   | 6,700             |   |             | 1,000  |             |   | ---              |   |   | (7,700 | ) |   | (131,400 | ) |
| Earnings                    (loss) from discontinued                    operations              |   |                                      | 500      |             |   | ---               |   |             | ---    |             |   | 500              |   |   | (500 | ) |   | 500 |   |
|                       Net (loss) earnings                                   |   | $                                         | (130,900 | )                | $      | 6,700             |   | $                | 1,000  |             | $      | 500              |   | $ | (8,200 | ) | $ | (130,900 | ) |

**Unaudited      Condensed Consolidating Statement of Operations**

**For      the nine months ended October 1, 2005**

|                                                                                                             |   |                                      |    | **Guarantor**    |   | **Non-Guarantor** |   |             |    | **Nortek**       |   |
|------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|---------|------------------|--------|-------------------|--------|------------------|---------|------------------|--------|
|                                                                                                             |   | **Parent**                                |    | **Subsidiaries** |   | **Subsidiaries**  |   | **Eliminations** |    | **Consolidated** |   |
|                                                                                                             |   | *(Amounts                  in thousands)* |    |
|                                                                                                             |   |                                      |    |             |   |              |   |             |    |             |   |
| **Net                  Sales**                                                                                   |   | $                                         | ---     |             | $      | 1,204,765         |   | $                | 327,382 |             | $      | (76,303 | ) | $ | 1,455,844 |   |
|                                                                                                             |   |                                      |    |             |   |              |   |             |    |             |   |   |   |   |   |   |
| **Costs                  and expenses:**                                                                         |   |                                      |    |             |   |              |   |             |    |             |   |   |   |   |   |   |
|                     Costs of products sold                                                             |   |                                      | ---     |             |   | 833,193           |   |             | 264,243 |             |   | (76,303 | ) |   | 1,021,133 |   |
|                     Selling, general and administrative expenses                                       |   |                                      | 16,889  |             |   | 192,789           |   |             | 44,377  |             |   | --- |   |   | 254,055 |   |
|                     Amortization of intangible assets                                                  |   |                                      | 375     |             |   | 11,160            |   |             | 1,574   |             |   | --- |   |   | 13,109 |   |
|                                                                                                             |   |                                      | 17,264  |             |   | 1,037,142         |   |             | 310,194 |             |   | (76,303 | ) |   | 1,288,297 |   |
| Operating                  (loss) earnings                                                                       |   |                                      | (17,264 | )                |   | 167,623           |   |             | 17,188  |             |   | --- |   |   | 167,547 |   |
| Interest                  expense                                                                                |   |                                      | (73,962 | )                |   | (1,418            | )      |             | (593    | )                |   | --- |   |   | (75,973 | ) |
| Investment                  income                                                                               |   |                                      | 878     |             |   | 14                |   |             | 134     |             |   | --- |   |   | 1,026 |   |
| (Loss)                  income before charges and allocations to subsidiaries and                                |   |                                      |    |             |   |              |   |             |    |             |   |   |   |   |   |   |
|                      equity (loss) in subsidiaries' earnings before income                  taxes |   |                                      | (90,348 | )                |   | 166,219           |   |             | 16,729  |             |   | --- |   |   | 92,600 |   |
| Charges                    and allocations to subsidiaries and equity                    (loss) in subsidiaries' |   |                                      |    |             |   |              |   |             |    |             |   |   |   |   |   |   |
|     earnings                  before income taxes                                            |   |                                      | 182,948 |             |   | (42,819           | )      |             | (529    | )                |   | (139,600 | ) |   | --- |   |
| Earnings                  (loss) from continuing operations before                                               |   |                                      |    |             |   |              |   |             |    |             |   |   |   |   |   |   |
|     provision                  (benefit) for income taxes                                    |   |                                      | 92,600  |             |   | 123,400           |   |             | 16,200  |             |   | (139,600 | ) |   | 92,600 |   |
| Provision                  (benefit) for income taxes                                                            |   |                                      | 35,600  |             |   | 45,700            |   |             | 6,100   |             |   | (51,800 | ) |   | 35,600 |   |
|                      Net earnings (loss)                                                          |   | $                                         | 57,000  |             | $      | 77,700            |   | $                | 10,100  |             | $      | (87,800 | ) | $ | 57,000 |   |

**Unaudited      Condensed Consolidating Statement of Operations**

**For      the period from January 1, 2004 to August 27, 2004**

|                                                                                                           |   |                                        |     | **Guarantor**    |   | **Non-Guarantor** |   | **Discontinued** |    |             |   | **Nortek**       |   |
|----------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|----------|------------------|--------|-------------------|--------|------------------|---------|------------------|--------|------------------|--------|
|                                                                                                           |   | **Parent**                                  |     | **Subsidiaries** |   | **Subsidiaries**  |   | **Operations**   |    | **Eliminations** |   | **Consolidated** |   |
|                                                                                                           |   | *(Amounts                    in thousands)* |     |
|                                                                                                           |   |                                        |     |             |   |              |   |             |    |             |   |             |   |
| **Net                    Sales**                                                                               |   | $                                           | ---      |             | $      | 910,097           |   | $                | 268,816 |             | $      | ---              |   | $ | (61,053 | ) | $ | 1,117,860 |   |
|                                                                                                           |   |                                        |     |             |   |              |   |             |    |             |   |             |   |   |   |   |   |   |   |
| **Costs                    and expenses:**                                                                     |   |                                        |     |             |   |              |   |             |    |             |   |             |   |   |   |   |   |   |   |
|                        Costs of products sold                                                   |   |                                        | ---      |             |   | 638,217           |   |             | 215,595 |             |   | ---              |   |   | (61,053 | ) |   | 792,759 |   |
|                        Selling, general and administrative expenses                             |   |                                        | 23,003   |             |   | 142,432           |   |             | 34,508  |             |   | ---              |   |   | --- |   |   | 199,943 |   |
|                        Amortization of intangible assets                                        |   |                                        | ---      |             |   | 7,597             |   |             | 1,272   |             |   | ---              |   |   | --- |   |   | 8,869 |   |
|                          Expenses and charges arising from                      the Acquisition |   |                                        | 72,600   |             |   | 10,000            |   |             | 1,100   |             |   | ---              |   |   | --- |   |   | 83,700 |   |
|                                                                                                           |   |                                        | 95,603   |             |   | 798,246           |   |             | 252,475 |             |   | ---              |   |   | (61,053 | ) |   | 1,085,271 |   |
| Operating                    (loss) earnings                                                                   |   |                                        | (95,603  | )                |   | 111,851           |   |             | 16,341  |             |   | ---              |   |   | --- |   |   | 32,589 |   |
| Interest                    expense                                                                            |   |                                        | (54,695  | )                |   | (953              | )      |             | (425    | )                |   | ---              |   |   | --- |   |   | (56,073 | ) |
| Loss                    from debt retirement                                                                   |   |                                        | (130,736 | )                |   | ---               |   |             | ---     |             |   | ---              |   |   | --- |   |   | (130,736 | ) |
| Investment                    income                                                                           |   |                                        | 1,360    |             |   | 9                 |   |             | 151     |             |   | ---              |   |   | --- |   |   | 1,520 |   |
| (Loss)                    income before charges and allocations                                                |   |                                        |     |             |   |              |   |             |    |             |   |             |   |   |   |   |   |   |   |
|                        to subsidiaries and equity (loss) in                                     |   |                                        |     |             |   |              |   |             |    |             |   |             |   |   |   |   |   |   |   |
|                        subsidiaries' earnings before income taxes                               |   |                                        | (279,674 | )                |   | 110,907           |   |             | 16,067  |             |   | ---              |   |   | --- |   |   | (152,700 | ) |
| Charges                    and allocations to subsidiaries and                                                 |   |                                        |     |             |   |              |   |             |    |             |   |             |   |   |   |   |   |   |   |
|                        equity (loss) in subsidiaries' earnings                                  |   |                                        |     |             |   |              |   |             |    |             |   |             |   |   |   |   |   |   |   |
|                        before income taxes                                                      |   |                                        | 126,974  |             |   | (26,107           | )      |             | (167    | )                |   | ---              |   |   | (100,700 | ) |   | --- |   |
| (Loss)                    earnings from continuing operations                                                  |   |                                        |     |             |   |              |   |             |    |             |   |             |   |   |   |   |   |   |   |
|                         before (benefit) provision for income taxes                        |   |                                        | (152,700 | )                |   | 84,800            |   |             | 15,900  |             |   | ---              |   |   | (100,700 | ) |   | (152,700 | ) |
| (Benefit)                    provision for income taxes                                                        |   |                                        | (41,400  | )                |   | 33,100            |   |             | 7,500   |             |   | ---              |   |   | (40,600 | ) |   | (41,400 | ) |
| (Loss)                    earnings from continuing operations                                                  |   |                                        | (111,300 | )                |   | 51,700            |   |             | 8,400   |             |   | ---              |   |   | (60,100 | ) |   | (111,300 | ) |
| Earnings                    from discontinued operations                                                       |   |                                        | 67,400   |             |   | ---               |   |             | ---     |             |   | 67,400           |   |   | (67,400 | ) |   | 67,400 |   |
|                        Net (loss) earnings                                                      |   | $                                           | (43,900  | )                | $      | 51,700            |   | $                | 8,400   |             | $      | 67,400           |   | $ | (127,500 | ) | $ | (43,900 | ) |

**Unaudited      Condensed Consolidating Cash Flow Statement**

**For      the nine months ended October 1, 2005**

|                                                                                                        |   |                                      |    | **Guarantor**    |   | **Non-Guarantor** |   | **Nortek**       |    |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|---------|------------------|--------|-------------------|--------|------------------|---------|
|                                                                                                        |   | **Parent**                                |    | **Subsidiaries** |   | **Subsidiaries**  |   | **Consolidated** |    |
|                                                                                                        |   | *(Amounts                  in thousands)* |    |
| **Cash                  Flows from operating activities:**                                                  |   |                                      |    |             |   |              |   |             |    |
| Net                  cash (used in) provided by operating activities                                        |   | $                                         | (49,510 | )                | $      | 94,492            |   | $                | 14,795  |   | $ | 59,777 |   |
| **Cash                  Flows from investing activities:**                                                  |   |                                      |    |             |   |              |   |             |    |   |   |   |   |
| Capital                  expenditures                                                                       |   |                                      | (451    | )                |   | (10,564           | )      |             | (4,005  | ) |   | (15,020 | ) |
| Net                  cash paid for businesses acquired                                                      |   |                                      | ---     |             |   | (82,300           | )      |             | (6,500  | ) |   | (88,800 | ) |
| Proceeds                  from the sale of property and equipment                                           |   |                                      | ---     |             |   | 6,105             |   |             | 39      |   |   | 6,144 |   |
| Change                  in restricted cash and investments                                                  |   |                                      | ---     |             |   | (2,070            | )      |             | ---     |   |   | (2,070 | ) |
| Other,                  net                                                                                 |   |                                      | 3       |             |   | (1,299            | )      |             | (189    | ) |   | (1,485 | ) |
|                      Net cash used in investing activities                                   |   |                                      | (448    | )                |   | (90,128           | )      |             | (10,655 | ) |   | (101,231 | ) |
| **Cash                  Flows from financing activities:**                                                  |   |                                      |    |             |   |              |   |             |    |   |   |   |   |
| Change                  in borrowings, net                                                                  |   |                                      | (8,747  | )                |   | (1,475            | )      |             | 3,917   |   |   | (6,305 | ) |
| Other,                  net                                                                                 |   |                                      | (207    | )                |   | ---               |   |             | ---     |   |   | (207 | ) |
|                      Net cash (used in) provided by financing activities                     |   |                                      | (8,954  | )                |   | (1,475            | )      |             | 3,917   |   |   | (6,512 | ) |
| Net                    (decrease) increase in unrestricted cash and cash                    equivalents     |   |                                      | (58,912 | )                |   | 2,889             |   |             | 8,057   |   |   | (47,966 | ) |
| Unrestricted                    cash and cash equivalents at the beginning of                    the period |   |                                      | 76,562  |             |   | 2,313             |   |             | 16,080  |   |   | 94,955 |   |
| Unrestricted                    cash and cash equivalents at the end of the period                          |   | $                                         | 17,650  |             | $      | 5,202             |   | $                | 24,137  |   | $ | 46,989 |   |

**Unaudited      Condensed Consolidating Cash Flow Statement**

**For      the period from August 28, 2004 to October 2, 2004**

|                                                                                                        |   |                                      |     | **Guarantor**    |   | **Non-Guarantor** |   | **Discontinued** |   | **Nortek**       |   |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|----------|------------------|--------|-------------------|--------|------------------|--------|------------------|--------|
|                                                                                                        |   | **Parent**                                |     | **Subsidiaries** |   | **Subsidiaries**  |   | **Operations**   |   | **Consolidated** |   |
|                                                                                                        |   | *(Amounts                  in thousands)* |     |
| **Cash                  Flows from operating activities:**                                                  |   |                                      |     |             |   |              |   |             |   |             |   |
| Net                  cash (used in) provided by operating activities                                        |   | $                                         | (3,697   | )                | $      | 5,153             |   | $                | 5,432  |             | $      | 7,859 |   | $ | 14,747 |   |
| **Cash                  Flows from investing activities:**                                                  |   |                                      |     |             |   |              |   |             |   |             |   |   |   |   |   |   |
| Capital                  expenditures                                                                       |   |                                      | ---      |             |   | (2,254            | )      |             | (366   | )                |   | --- |   |   | (2,620 | ) |
| Purchase                  of outstanding equity shares of the Company                                       |   |                                      |     |             |   |              |   |             |   |             |   |   |   |   |   |   |
|                      by Thomas H. Lee Partners L.P. and affiliates                           |   |                                      | (706,189 | )                |   | ---               |   |             | ---    |             |   | --- |   |   | (706,189 | ) |
| Payment                  of Acquisition fees and expenses                                                   |   |                                      | (57,000  | )                |   | ---               |   |             | ---    |             |   | --- |   |   | (57,000 | ) |
| Change                  in restricted cash and investments                                                  |   |                                      | ---      |             |   | 1                 |   |             | ---    |             |   | --- |   |   | 1 |   |
| Other,                  net                                                                                 |   |                                      | (3       | )                |   | (69               | )      |             | 19     |             |   | --- |   |   | (53 | ) |
|                      Net cash used in investing activities                                   |   |                                      | (763,192 | )                |   | (2,322            | )      |             | (347   | )                |   | --- |   |   | (765,861 | ) |
| **Cash                  Flows from financing activities:**                                                  |   |                                      |     |             |   |              |   |             |   |             |   |   |   |   |   |   |
| Change                  in borrowings, net                                                                  |   |                                      | ---      |             |   | 1,245             |   |             | (1,729 | )                |   | --- |   |   | (484 | ) |
| Redemption                  of notes in connection with the Acquisition                                     |   |                                      | (919,300 | )                |   | ---               |   |             | ---    |             |   | --- |   |   | (919,300 | ) |
| Net                  proceeds from the sale of the 8 1/2% Notes                                             |   |                                      | 605,400  |             |   | ---               |   |             | ---    |             |   | --- |   |   | 605,400 |   |
| Net                  proceeds from borrowings under the Senior                                              |   |                                      |     |             |   |              |   |             |   |             |   |   |   |   |   |   |
|                      Secured Credit Facility                                                 |   |                                      | 685,350  |             |   | ---               |   |             | ---    |             |   | --- |   |   | 685,350 |   |
| Equity                    investment by Thomas H. Lee Partners L.P. and                    affiliates       |   |                                      | 361,841  |             |   | ---               |   |             | ---    |             |   | --- |   |   | 361,841 |   |
| Settlement                  of stock options                                                                |   |                                      | (87,943  | )                |   | (16,094           | )      |             | (1,136 | )                |   | (7,859 | ) |   | (113,032 | ) |
| Other,                  net                                                                                 |   |                                      | 76       |             |   | ---               |   |             | ---    |             |   | --- |   |   | 76 |   |
|                      Net cash provided by (used in) financing activities                     |   |                                      | 645,424  |             |   | (14,849           | )      |             | (2,865 | )                |   | (7,859 | ) |   | 619,851 |   |
| Net                    (decrease) increase in unrestricted cash and cash                    equivalents     |   |                                      | (121,465 | )                |   | (12,018           | )      |             | 2,220  |             |   | --- |   |   | (131,263 | ) |
| Unrestricted                    cash and cash equivalents at the beginning                    of the period |   |                                      | 170,410  |             |   | 13,637            |   |             | 17,903 |             |   | --- |   |   | 201,950 |   |
| Unrestricted                    cash and cash equivalents at the end                    of the period       |   | $                                         | 48,945   |             | $      | 1,619             |   | $                | 20,123 |             | $      | --- |   | $ | 70,687 |   |

**Unaudited      Condensed Consolidating Cash Flow Statement**

**For      the period from January 1, 2004 to August 27, 2004**

|                                                                                                        |   |                                      |     | **Guarantor**    |   | **Non-Guarantor** |   | **Discontinued** |   | **Nortek**       |   |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|----------|------------------|--------|-------------------|--------|------------------|--------|------------------|--------|
|                                                                                                        |   | **Parent**                                |     | **Subsidiaries** |   | **Subsidiaries**  |   | **Operations**   |   | **Consolidated** |   |
|                                                                                                        |   | *(Amounts                  in thousands)* |     |
| **Cash                  Flows from operating activities:**                                                  |   |                                      |     |             |   |              |   |             |   |             |   |
| Net                  cash provided by (used in) operating activities                                        |   | $                                         | 530,585  |             | $      | 25,473            |   | $                | 6,639  |             | $      | (526,000 | ) | $ | 36,697 |   |
| **Cash                  Flows from investing activities:**                                                  |   |                                      |     |             |   |              |   |             |   |             |   |   |   |   |   |   |
| Capital                  expenditures                                                                       |   |                                      | (343     | )                |   | (9,016            | )      |             | (2,489 | )                |   | --- |   |   | (11,848 | ) |
| Net                  cash paid for businesses acquired                                                      |   |                                      | ---      |             |   | (16,500           | )      |             | ---    |             |   | --- |   |   | (16,500 | ) |
| Proceeds                    from the sale of investments and marketable                    securities       |   |                                      | 5,000    |             |   | ---               |   |             | ---    |             |   | --- |   |   | 5,000 |   |
| Purchase                  of investments and marketable securities                                          |   |                                      | (5,000   | )                |   | ---               |   |             | ---    |             |   | --- |   |   | (5,000 | ) |
| Proceeds                  from the sale of discontinued businesses                                          |   |                                      | ---      |             |   | ---               |   |             | ---    |             |   | 526,000 |   |   | 526,000 |   |
| Change                  in restricted cash and investments                                                  |   |                                      | ---      |             |   | (103              | )      |             | ---    |             |   | --- |   |   | (103 | ) |
| Other,                  net                                                                                 |   |                                      | (129     | )                |   | (228              | )      |             | 66     |             |   | --- |   |   | (291 | ) |
|                      Net cash (used in) provided by investing activities                     |   |                                      | (472     | )                |   | (25,847           | )      |             | (2,423 | )                |   | 526,000 |   |   | 497,258 |   |
| **Cash                  Flows from financing activities:**                                                  |   |                                      |     |             |   |              |   |             |   |             |   |   |   |   |   |   |
| Change                  in borrowings, net                                                                  |   |                                      | (719     | )                |   | 267               |   |             | (4,918 | )                |   | --- |   |   | (5,370 | ) |
| Sale                  of Floating Rate Notes                                                                |   |                                      | 196,000  |             |   | ---               |   |             | ---    |             |   | --- |   |   | 196,000 |   |
| Redemption                  of Senior Notes                                                                 |   |                                      | (716,700 | )                |   | ---               |   |             | ---    |             |   | --- |   |   | (716,700 | ) |
| Other,                  net                                                                                 |   |                                      | (55      | )                |   | ---               |   |             | ---    |             |   | --- |   |   | (55 | ) |
|                      Net cash (used in) provided by financing activities                     |   |                                      | (521,474 | )                |   | 267               |   |             | (4,918 | )                |   | --- |   |   | (526,125 | ) |
| Net                    increase (decrease) in unrestricted cash and cash                    equivalents     |   |                                      | 8,639    |             |   | (107              | )      |             | (702   | )                |   | --- |   |   | 7,830 |   |
| Unrestricted                    cash and cash equivalents at the beginning                    of the period |   |                                      | 161,771  |             |   | 13,744            |   |             | 18,605 |             |   | --- |   |   | 194,120 |   |
| Unrestricted                    cash and cash equivalents at the end                    of the period       |   | $                                         | 170,410  |             | $      | 13,637            |   | $                | 17,903 |             | $      | --- |   | $ | 201,950 |   |

| (M) | As                of October 1, 2005, approximately 11.1% of the Company’s workforce was                subject to various collective bargaining agreements. Collective bargaining                agreements covering approximately 2.4% of the Company’s workforce expired                in 2004 and are currently being renegotiated. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**NORTEK,        INC. AND SUBSIDIARIES**

**MANAGEMENT’S        DISCUSSION AND ANALYSIS**

**OF        THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE THIRD QUARTER AND FIRST NINE MONTHS ENDED OCTOBER 1,        2005**

**AND        THE THIRD QUARTER AND FIRST NINE MONTHS ENDED OCTOBER 2,        2004**

**ITEM      2. **
**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS**

| ·   | kitchen                range hoods, |
|--------------------|-------------------------------------|

| ·   | built-in                exhaust fans (such as bath fans and fan, heater and light combination                units), |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

| ·   | indoor                air quality products, |
|--------------------|---------------------------------------------|

| ·   | medicine                cabinets, |
|--------------------|-----------------------------------|

| ·   | door                chimes, |
|--------------------|-----------------------------|

| ·   | musical                intercoms, |
|--------------------|-----------------------------------|

| ·   | central                vacuum systems, |
|--------------------|----------------------------------------|

| ·   | security                and access control products, |
|--------------------|------------------------------------------------------|

| ·   | multi-room                audio, video distribution and related equipment and controls,                and |
|--------------------|------------------------------------------------------------------------------------------------------------|

| ·   | architectural                built-in loudspeakers |
|--------------------|----------------------------------------------------|

***The      THL Transaction***

***Financial      Statement Presentation***

***Discontinued      Operations***

***Acquisitions***

***Critical      Accounting Policies***

| ·   | Revenue                Recognition and Related Expenses |
|--------------------|---------------------------------------------------------|

| ·   | Inventory                Valuation |
|--------------------|------------------------------------|

| ·   | Prepaid                Income Tax Assets and Deferred Tax                Liabilities |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | Goodwill |
|--------------------|----------|

| ·   | Pensions                and Post Retirement Health Benefits |
|--------------------|-------------------------------------------------------------|

| ·   | Insurance                Liabilities |
|--------------------|--------------------------------------|

| ·   | Contingencies |
|--------------------|---------------|

**Results      of Operations**

|                                                                                                 |   | **Post-Acquisition**                             |    | **Pre-Acquisition**                 |   | **Combined                  Three** |   |
|------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|-------------------------------------|--------|-------------------------------------|--------|
|                                                                                                 |   | **Aug                  28, 2004 -**              |    | **July                  4, 2004 -** |   | **Months                  Ended**   |   |
|                                                                                                 |   | **Oct.                  2, 2004**                |    | **Aug.                  27, 2004**  |   | **Oct.                  2, 2004**   |   |
|                                                                                                 |   | *(Dollar                  amounts in thousands)* |    |
|                                                                                                 |   | *(Unaudited)*                                    |    |
| **Net                  sales:**                                                                      |   |                                             |    |                                |   |                                |   |
| Residential                  Building Products                                                       |   | $                                                | 99,185  |                                | $      | 146,523                             |   | $ | 245,708 |   |
| Air                  Conditioning and Heating Products                                               |   |                                             | 61,843  |                                |   | 120,313                             |   |   | 182,156 |   |
|                      Consolidated net sales                                           |   | $                                                | 161,028 |                                | $      | 266,836                             |   | $ | 427,864 |   |
|                                                                                                 |   |                                             |    |                                |   |                                |   |   |   |   |
| **Operating                  earnings (loss):**                                                      |   |                                             |    |                                |   |                                |   |   |   |   |
| Residential                  Building Products                                                       |   | $                                                | 16,387  |                                | $      | 20,711                              |   | $ | 37,098 |   |
| Air                  Conditioning and Heating Products                                               |   |                                             | 1,168   |                                |   | 217                                 |   |   | 1,385 |   |
|                      Subtotal                                                         |   |                                             | 17,555  |                                |   | 20,928                              |   |   | 38,483 |   |
| **Unallocated:**                                                                                     |   |                                             |    |                                |   |                                |   |   |   |   |
| Expenses                  and charges arising from the Acquisition                                   |   |                                             | ---     |                                |   | (38,500                             | )      |   | (38,500 | ) |
| Stock-based                  compensation charges                                                    |   |                                             | ---     |                                |   | (34,100                             | )      |   | (34,100 | ) |
| Other,                  net                                                                          |   |                                             | (2,090  | )                                   |   | (4,299                              | )      |   | (6,389 | ) |
|                      Consolidated operating earnings (loss)                           |   | $                                                | 15,465  |                                | $      | (55,971                             | )      | $ | (40,506 | ) |
|                                                                                                 |   |                                             |    |                                |   |                                |   |   |   |   |
| **Depreciation                  and amortization expense:**                                          |   |                                             |    |                                |   |                                |   |   |   |   |
| Residential                  Building Products                                                       |   | $                                                | 4,241   |                                | $      | 3,539                               |   | $ | 7,780 |   |
| Air                  Conditioning and Heating Products                                               |   |                                             | 1,953   |                                |   | 2,319                               |   |   | 4,272 |   |
| Other                                                                                                |   |                                             | 113     |                                |   | 103                                 |   |   | 216 |   |
|                                                                                                 |   | $                                                | 6,307   |                                | $      | 5,961                               |   | $ | 12,268 |   |
|                                                                                                 |   |                                             |    |                                |   |                                |   |   |   |   |
| **Operating                  earnings (loss) margin:**                                               |   |                                             |    |                                |   |                                |   |   |   |   |
| Residential                  Building Products                                                       |   |                                             | 16.5    | %                                   |   | 14.1                                | %      |   | 15.1 | % |
| Air                  Conditioning and Heating Products                                               |   |                                             | 1.9     |                                |   | 0.2                                 |   |   | 0.8 |   |
|                      Consolidated                                                     |   |                                             | 9.6     | %                                   |   | (21.0                               | )%     |   | (9.5 | )% |
|                                                                                                 |   |                                             |    |                                |   |                                |   |   |   |   |
| **Depreciation                    and amortization expense                    as a % of net sales:** |   |                                             |    |                                |   |                                |   |   |   |   |
| Residential                  Building Products                                                       |   |                                             | 4.3     | %                                   |   | 2.4                                 | %      |   | 3.2 | % |
| Air                  Conditioning and Heating Products                                               |   |                                             | 3.2     |                                |   | 1.9                                 |   |   | 2.3 |   |
|                      Consolidated                                                     |   |                                             | 3.9     | %                                   |   | 2.2                                 | %      |   | 2.9 | % |

|                                                                                                 |   |                                             |    |                                    |   | **Change                  in Earnings**  |
|------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|-----------------------------------------|--------|------------------------------------------|
|                                                                                                 |   | **Third                  Quarter Ended**         |    | **Third                  Quarter 2005** |
|                                                                                                 |   | **Oct.                  1,**                     |    | **Oct.                  2,**            |   | **as                  Compared to 2004** |
|                                                                                                 |   | **2005**                                         |    | **2004                  (1)**           |   | $                                   |   | % |
|                                                                                                 |   | *(Dollar                  amounts in thousands)* |    |
| **Net                  sales:**                                                                      |   |                                             |    |                                    |   |                                     |   |   |   |
| Residential                  Building Products                                                       |   | $                                                | 299,077 |                                    | $      | 245,708                                  |   | $ | 53,369 |   |   | 21.7 | % |
| Air                  Conditioning and Heating Products                                               |   |                                             | 223,789 |                                    |   | 182,156                                  |   |   | 41,633 |   |   | 22.9 |   |
|                      Consolidated net sales                                           |   | $                                                | 522,866 |                                    | $      | 427,864                                  |   | $ | 95,002 |   |   | 22.2 | % |
|                                                                                                 |   |                                             |    |                                    |   |                                     |   |   |   |   |   |   |   |
| **Operating                  earnings (loss):**                                                      |   |                                             |    |                                    |   |                                     |   |   |   |   |   |   |   |
| Residential                  Building Products                                                       |   | $                                                | 51,373  |                                    | $      | 37,098                                   |   | $ | 14,275 |   |   | 38.5 | % |
| Air                  Conditioning and Heating Products                                               |   |                                             | 22,154  |                                    |   | 1,385                                    |   |   | 20,769 |   |   | *                    |   |
|                      Subtotal                                                         |   |                                             | 73,527  |                                    |   | 38,483                                   |   |   | 35,044 |   |   | 91.1 |   |
| **Unallocated:**                                                                                     |   |                                             |    |                                    |   |                                     |   |   |   |   |   |   |   |
| Expenses                    and charges arising from                    the Acquisition              |   |                                             | ---     |                                    |   | (38,500                                  | ) |   | 38,500 |   |   | *                    |    |
| Stock-based                  compensation charges                                                    |   |                                             | (100    | )                                       |   | (34,100                                  | ) |   | 34,000 |   |   | 99.7 |   |
| Other,                  net                                                                          |   |                                             | (5,847  | )                                       |   | (6,389                                   | ) |   | 542 |   |   | 8.5 |   |
|                      Consolidated operating earnings (loss)                           |   | $                                                | 67,580  |                                    | $      | (40,506                                  | ) | $ | 108,086 |   |   | *                    | % |
|                                                                                                 |   |                                             |    |                                    |   |                                     |   |   |   |   |   |   |   |
| **Depreciation                  and amortization expense:**                                          |   |                                             |    |                                    |   |                                     |   |   |   |   |   |   |   |
| Residential                  Building Products                                                       |   | $                                                | 7,243   |                                    | $      | 7,780                                    |   | $ | (537 | ) |   | (6.9 | )% |
| Air                  Conditioning and Heating Products                                               |   |                                             | 4,036   |                                    |   | 4,272                                    |   |   | (236 | ) |   | (5.5 | ) |
| Other                                                                                                |   |                                             | 357     |                                    |   | 216                                      |   |   | 141 |   |   | 65.3 |   |
|                                                                                                 |   | $                                                | 11,636  |                                    | $      | 12,268                                   |   | $ | (632 | ) |   | (5.2 | )% |
|                                                                                                 |   |                                             |    |                                    |   |                                     |   |   |   |   |   |   |   |
| **Operating                  earnings (loss) margin:**                                               |   |                                             |    |                                    |   |                                     |   |   |   |   |   |   |   |
| Residential                  Building Products                                                       |   |                                             | 17.2    | %                                       |   | 15.1                                     | % |   |   |   |   |   |   |
| Air                  Conditioning and Heating Products                                               |   |                                             | 9.9     |                                    |   | 0.8                                      |   |   |   |   |   |   |   |
|                      Consolidated                                                     |   |                                             | 12.9    | %                                       |   | (9.5                                     | )% |   |   |   |   |   |   |
|                                                                                                 |   |                                             |    |                                    |   |                                     |   |   |   |   |   |   |   |
|                                                                                                 |   |                                             |    |                                    |   |                                     |   |   |   |   |   |   |   |
| **Depreciation                    and amortization expense                    as a % of net sales:** |   |                                             |    |                                    |   |                                     |   |   |   |   |   |   |   |
| Residential                  Building Products                                                       |   |                                             | 2.4     | %                                       |   | 3.2                                      | % |   |   |   |   |   |   |
| Air                  Conditioning and Heating Products                                               |   |                                             | 1.8     |                                    |   | 2.3                                      |   |   |   |   |   |   |   |
|                      Consolidated                                                     |   |                                             | 2.2     | %                                       |   | 2.9                                      | % |   |   |   |   |   |   |

|                                                                                                 |   | **Post-Acquisition**                             |    | **Pre-Acquisition**                 |   | **Combined                  Nine** |   |
|------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|-------------------------------------|--------|------------------------------------|--------|
|                                                                                                 |   | **Aug.                  28, 2004 -**             |    | **Jan.                  1, 2004 -** |   | **Months                  Ended**  |   |
|                                                                                                 |   | **Oct.                  2, 2004**                |    | **Aug.                  27, 2004**  |   | **Oct.                  2, 2004**  |   |
|                                                                                                 |   | *(Dollar                  amounts in thousands)* |    |
| **Net                  sales:**                                                                      |   | *(Unaudited)*                                    |    |
| Residential                  Building Products                                                       |   | $                                                | 99,185  |                                | $      | 623,859                            |   | $ | 723,044 |   |
| Air                  Conditioning and Heating Products                                               |   |                                             | 61,843  |                                |   | 494,001                            |   |   | 555,844 |   |
|                      Consolidated net sales                                           |   | $                                                | 161,028 |                                | $      | 1,117,860                          |   | $ | 1,278,888 |   |
|                                                                                                 |   |                                             |    |                                |   |                               |   |   |   |   |
| **Operating                  earnings:**                                                             |   |                                             |    |                                |   |                               |   |   |   |   |
| Residential                  Building Products                                                       |   | $                                                | 16,387  |                                | $      | 102,808                            |   | $ | 119,195 |   |
| Air                  Conditioning and Heating Products                                               |   |                                             | 1,168   |                                |   | 25,507                             |   |   | 26,675 |   |
|                      Subtotal                                                         |   |                                             | 17,555  |                                |   | 128,315                            |   |   | 145,870 |   |
| **Unallocated:**                                                                                     |   |                                             |    |                                |   |                               |   |   |   |   |
| Expenses                    and charges arising from                    the Acquisition              |   |                                             | ---     |                                |   | (38,500                            | )      |   | (38,500 | ) |
| Stock-based                  compensation charges                                                    |   |                                             | ---     |                                |   | (36,400                            | )      |   | (36,400 | ) |
| Foreign                  exchange loss on intercompany debt                                          |   |                                             | ---     |                                |   | (200                               | )      |   | (200 | ) |
| Other,                  net                                                                          |   |                                             | (2,090  | )                                   |   | (20,626                            | )      |   | (22,716 | ) |
|                      Consolidated operating earnings                                  |   | $                                                | 15,465  |                                | $      | 32,589                             |   | $ | 48,054 |   |
|                                                                                                 |   |                                             |    |                                |   |                               |   |   |   |   |
| **Depreciation                  and amortization expense:**                                          |   |                                             |    |                                |   |                               |   |   |   |   |
| Residential                  Building Products                                                       |   | $                                                | 4,241   |                                | $      | 15,374                             |   | $ | 19,615 |   |
| Air                  Conditioning and Heating Products                                               |   |                                             | 1,953   |                                |   | 10,041                             |   |   | 11,994 |   |
| Other                                                                                                |   |                                             | 113     |                                |   | 408                                |   |   | 521 |   |
|                                                                                                 |   | $                                                | 6,307   |                                | $      | 25,823                             |   | $ | 32,130 |   |
|                                                                                                 |   |                                             |    |                                |   |                               |   |   |   |   |
| **Operating                  earnings margin:**                                                      |   |                                             |    |                                |   |                               |   |   |   |   |
| Residential                  Building Products                                                       |   |                                             | 16.5    | %                                   |   | 16.5                               | %      |   | 16.5 | % |
| Air                  Conditioning and Heating Products                                               |   |                                             | 1.9     |                                |   | 5.2                                |   |   | 4.8 |   |
|                      Consolidated                                                     |   |                                             | 9.6     | %                                   |   | 2.9                                | %      |   | 3.8 | % |
|                                                                                                 |   |                                             |    |                                |   |                               |   |   |   |   |
|                                                                                                 |   |                                             |    |                                |   |                               |   |   |   |   |
| **Depreciation                    and amortization expense                    as a % of net sales:** |   |                                             |    |                                |   |                               |   |   |   |   |
| Residential                  Building Products                                                       |   |                                             | 4.3     | %                                   |   | 2.5                                | %      |   | 2.7 | % |
| Air                  Conditioning and Heating Products                                               |   |                                             | 3.2     |                                |   | 2.0                                |   |   | 2.2 |   |
|                      Consolidated                                                     |   |                                             | 3.9     | %                                   |   | 2.3                                | %      |   | 2.5 | % |

|                                                                                                 |   |                                             |      |                                        |   | **Change                  in Earnings**  |
|------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|-----------|---------------------------------------------|--------|------------------------------------------|
|                                                                                                 |   | **First                  Nine Months Ended**     |      | **First                  Nine Months 2005** |
|                                                                                                 |   | **Oct.                  1,**                     |      | **Oct.                  2,**                |   | **as                  Compared to 2004** |
|                                                                                                 |   | **2005**                                         |      | **2004                  (1)**               |   | $                                   |   | % |
|                                                                                                 |   | *(Dollar                  amounts in thousands)* |
| **Net                  sales:**                                                                      |   |                                             |      |                                        |   |                                     |   |   |   |
| Residential                  Building Products                                                       |   | $                                                | 839,029   |                                        | $      | 723,044                                  |   | $ | 115,985 |   |   | 16.0 | % |
| Air                  Conditioning and Heating Products                                               |   |                                             | 616,815   |                                        |   | 555,844                                  |   |   | 60,971 |   |   | 11.0 |   |
|                      Consolidated net sales                                           |   | $                                                | 1,455,844 |                                        | $      | 1,278,888                                |   | $ | 176,956 |   |   | 13.8 | % |
|                                                                                                 |   |                                             |      |                                        |   |                                     |   |   |   |   |   |   |   |
| **Operating                  earnings:**                                                             |   |                                             |      |                                        |   |                                     |   |   |   |   |   |   |   |
| Residential                  Building Products                                                       |   | $                                                | 135,012   |                                        | $      | 119,195                                  |   | $ | 15,817 |   |   | 13.3 | % |
| Air                  Conditioning and Heating Products                                               |   |                                             | 49,927    |                                        |   | 26,675                                   |   |   | 23,252 |   |   | 87.2 |   |
|                      Subtotal                                                         |   |                                             | 184,939   |                                        |   | 145,870                                  |   |   | 39,069 |   |   | 26.8 |   |
| **Unallocated:**                                                                                     |   |                                             |      |                                        |   |                                     |   |   |   |   |   |   |   |
| Expenses                    and charges arising from                    the Acquisition              |   |                                             | ---       |                                        |   | (38,500                                  | ) |   | 38,500 |   |   | *                    |    |
| Stock-based                  compensation charges                                                    |   |                                             | (300      | )                                           |   | (36,400                                  | ) |   | 36,100 |   |   | 99.2 |   |
| Foreign                  exchange loss on intercompany debt                                          |   |                                             | (300      | )                                           |   | (200                                     | ) |   | (100 | ) |   | (50.0 | ) |
| Gain                  on legal settlement                                                            |   |                                             | 1,400     |                                        |   | ---                                      |   |   | 1,400 |   |   | *                    |   |
| Other,                  net                                                                          |   |                                             | (18,192   | )                                           |   | (22,716                                  | ) |   | 4,524 |   |   | 19.9 |   |
|                      Consolidated operating earnings                                  |   | $                                                | 167,547   |                                        | $      | 48,054                                   |   | $ | 119,493 |   |   | *                    | % |
|                                                                                                 |   |                                             |      |                                        |   |                                     |   |   |   |   |   |   |   |
| **Depreciation                  and amortization expense:**                                          |   |                                             |      |                                        |   |                                     |   |   |   |   |   |   |   |
| Residential                  Building Products                                                       |   | $                                                | 21,311    |                                        | $      | 19,615                                   |   | $ | 1,696 |   |   | 8.6 | % |
| Air                  Conditioning and Heating Products                                               |   |                                             | 12,002    |                                        |   | 11,994                                   |   |   | 8 |   |   | 0.1 |   |
| Other                                                                                                |   |                                             | 1,030     |                                        |   | 521                                      |   |   | 509 |   |   | 97.7 |   |
|                                                                                                 |   | $                                                | 34,343    |                                        | $      | 32,130                                   |   | $ | 2,213 |   |   | 6.9 | % |
|                                                                                                 |   |                                             |      |                                        |   |                                     |   |   |   |   |   |   |   |
| **Operating                  earnings margin:**                                                      |   |                                             |      |                                        |   |                                     |   |   |   |   |   |   |   |
| Residential                  Building Products                                                       |   |                                             | 16.1      | %                                           |   | 16.5                                     | % |   |   |   |   |   |   |
| Air                  Conditioning and Heating Products                                               |   |                                             | 8.1       |                                        |   | 4.8                                      |   |   |   |   |   |   |   |
|                      Consolidated                                                     |   |                                             | 11.5      | %                                           |   | 3.8                                      | % |   |   |   |   |   |   |
|                                                                                                 |   |                                             |      |                                        |   |                                     |   |   |   |   |   |   |   |
| **Depreciation                    and amortization expense                    as a % of net sales:** |   |                                             |      |                                        |   |                                     |   |   |   |   |   |   |   |
| Residential                  Building Products                                                       |   |                                             | 2.5       | %                                           |   | 2.7                                      | % |   |   |   |   |   |   |
| Air                  Conditioning and Heating Products                                               |   |                                             | 1.9       |                                        |   | 2.2                                      |   |   |   |   |   |   |   |
|                      Consolidated                                                     |   |                                             | 2.4       | %                                           |   | 2.5                                      | % |   |   |   |   |   |   |

| (1)   |                       The nine months ended October 2, 2004 represents the combined                Post-Acquisition and Pre-Acquisition periods of August 28, 2004 to                October                2, 2004 and January 1, 2004 to August 27, 2004,                respectively. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                            |   | **Post-Acquisition**                            |                                         | **Pre-Acquisition**                 |   | **Combined                  Three** |   |
|-------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|----------------------------------------------|-------------------------------------|--------|-------------------------------------|--------|
|                                                                                            |   | **Aug.                  28, 2004 -**            |                                         | **July                  4, 2004 -** |   | **Months                  Ended**   |   |
|                                                                                            |   | **Oct.                  2, 2004**               |                                         | **Aug.                  27, 2004**  |   | **Oct.                  2, 2004**   |   |
|                                                                                            |   | *(Dollar                  amounts in millions)* |                                         |
|                                                                                            |   | *(Unaudited)*                                   |                                         |
|                                                                                            |   |                                            |                                         |                                |   |                                |   |
| Net                  sales                                                                      |   | $                                               | 161.0                                        |                                | $      | 266.8                               |   | $ | 427.8 |   |
| Cost                  of products sold                                                          |   |                                            | 115.9                                        |                                |   | 191.1                               |   |   | 307.0 |   |
| Selling,                  general and administrative expenses, net                              |   |                                            | 28.2                                         |                                |   | 46.0                                |   |   | 74.2 |   |
| Amortization                  of intangible assets                                              |   |                                            | 1.4                                          |                                |   | 2.0                                 |   |   | 3.4 |   |
| Expenses                  and charges arising from the Acquisition                              |   |                                            | ---                                          |                                |   | 83.7                                |   |   | 83.7 |   |
| Operating                  earnings (loss)                                                      |   |                                            | 15.5                                         |                                |   | (56.0                               | )      |   | (40.5 | ) |
| Interest                  expense                                                               |   |                                            | (16.2                                        | )                                   |   | (12.1                               | )      |   | (28.3 | ) |
| Loss                  from debt retirement                                                      |   |                                            | ---                                          |                                |   | (118.8                              | )      |   | (118.8 | ) |
| Investment                  income                                                              |   |                                            | ---                                          |                                |   | 0.3                                 |   |   | 0.3 |   |
| Loss                    from continuing operations before income tax benefit                    |   |                                            | (0.7                                         | )                                   |   | (186.6                              | )      |   | (187.3 | ) |
| Income                  tax benefit                                                             |   |                                            | (0.3                                         | )                                   |   | (55.2                               | )      |   | (55.5 | ) |
| Loss                  from continuing operations                                                |   |                                            | (0.4                                         | )                                   |   | (131.4                              | )      |   | (131.8 | ) |
| Earnings                  from discontinued operations                                          |   |                                            | ---                                          |                                |   | 0.5                                 |   |   | 0.5 |   |
| Net                  loss                                                                       |   | $                                               | (0.4                                         | )                                   | $      | (130.9                              | )      | $ | (131.3 | ) |
|                                                                                            |   |                                            |                                         |                                |   |                                |   |   |   |   |
|                                                                                                 |   |                                            | **Percentage                  of Net Sales** |                                |
|                                                                                                 |   |                                            | **Post-Acquisition**                         |                                |   | **Pre-Acquisition**                 |   |   | **Combined                  Three** |   |
|                                                                                            |   |                                            | **Aug.                  28, 2004 -**         |                                |   | **July                  4, 2004 -** |   |   | **Months                  Ended** |   |
|                                                                                                 |   |                                            | **Oct.                  2, 2004**            |                                |   | **Aug.                  27, 2004**  |   |   | **Oct.                  2, 2004** |   |
|                                                                                            |   |                                            |                                         |                                |   |                                |   |   |   |   |
| Net                  sales                                                                      |   |                                            | 100.0                                        | %                                   |   | 100.0                               | %      |   | 100.0 | % |
| Cost                  of products sold                                                          |   |                                            | 72.0                                         |                                |   | 71.6                                |   |   | 71.8 |   |
| Selling,                  general and administrative expenses, net                              |   |                                            | 17.5                                         |                                |   | 17.2                                |   |   | 17.3 |   |
| Amortization                  of intangible assets                                              |   |                                            | 0.9                                          |                                |   | 0.8                                 |   |   | 0.8 |   |
| Expenses                  and charges arising from the Acquisition                              |   |                                            | ---                                          |                                |   | 31.4                                |   |   | 19.6 |   |
| Operating                  earnings (loss)                                                      |   |                                            | 9.6                                          |                                |   | (21.0                               | )      |   | (9.5 | ) |
| Interest                  expense                                                               |   |                                            | (10.0                                        | )                                   |   | (4.5                                | )      |   | (6.6 | ) |
| Loss                  from debt retirement                                                      |   |                                            | ---                                          |                                |   | (44.5                               | )      |   | (27.8 | ) |
| Investment                  income                                                              |   |                                            | ---                                          |                                |   | 0.1                                 |   |   | 0.1 |   |
| Loss                    from continuing operations before income                    tax benefit |   |                                            | (0.4                                         | )                                   |   | (69.9                               | )      |   | (43.8 | ) |
| Income                  tax benefit                                                             |   |                                            | (0.2                                         | )                                   |   | (20.7                               | )      |   | (13.0 | ) |
| Loss                  from continuing operations                                                |   |                                            | (0.2                                         | )                                   |   | (49.2                               | )      |   | (30.8 | ) |
| Earnings                  from discontinued operations                                          |   |                                            | ---                                          |                                |   | 0.2                                 |   |   | 0.1 |   |
| Net                  loss                                                                       |   |                                            | (0.2                                         | )%                                  |   | (49.0                               | )%     |   | (30.7 | )% |

|                                                                            |   |                                            |   |                                    |   | **Change                  in Earnings**  |
|---------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|-----------------------------------------|--------|------------------------------------------|
|                                                                            |   | **Third                  Quarter Ended**        |   | **Third                  Quarter 2005** |
|                                                                            |   | **Oct.                  1,**                    |   | **Oct.                  2,**            |   | **as                  Compared to 2004** |
|                                                                            |   | **2005**                                        |   | **2004                  (1)**           |   | $                                   |   | % |
|                                                                            |   | *(Dollar                  amounts in millions)* |
|                                                                            |   |                                            |   |                                    |   |                                     |   |   |   |
| Net                  sales                                                      |   | $                                               | 522.9  |                                    | $      | 427.8                                    |   | $ | 95.1 |   |   | 22.2 | % |
| Cost                  of products sold                                          |   |                                            | 361.3  |                                    |   | 307.0                                    |   |   | (54.3 | ) |   | (17.7 | ) |
| Selling,                  general and administrative expenses, net              |   |                                            | 89.6   |                                    |   | 74.2                                     |   |   | (15.4 | ) |   | (20.8 | ) |
| Amortization                  of intangible assets                              |   |                                            | 4.4    |                                    |   | 3.4                                      |   |   | (1.0 | ) |   | (29.4 | ) |
| Expenses                  and charges arising from the Acquisition              |   |                                            | ---    |                                    |   | 83.7                                     |   |   | 83.7 |   |   | * |   |
| Operating                  earnings (loss)                                      |   |                                            | 67.6   |                                    |   | (40.5                                    | ) |   | 108.1 |   |   | * |   |
| Interest                  expense                                               |   |                                            | (26.6  | )                                       |   | (28.3                                    | ) |   | 1.7 |   |   | 6.0 |   |
| Loss                  from debt retirement                                      |   |                                            | ---    |                                    |   | (118.8                                   | ) |   | 118.8 |   |   | * |   |
| Investment                  income                                              |   |                                            | 0.3    |                                    |   | 0.3                                      |   |   | --- |   |   | --- |   |
| Earnings                  (loss) from continuing operations                     |   |                                            |   |                                    |   |                                     |   |   |   |   |   |   |   |
|                      before provision (benefit) for income taxes |   |                                            | 41.3   |                                    |   | (187.3                                   | ) |   | 228.6 |   |   | * |   |
| Provision                  (benefit) for income taxes                           |   |                                            | 16.3   |                                    |   | (55.5                                    | ) |   | (71.8 | ) |   | * |   |
| Earnings                  (loss) from continuing operations                     |   |                                            | 25.0   |                                    |   | (131.8                                   | ) |   | 156.8 |   |   | * |   |
| Earnings                  from discontinued operations                          |   |                                            | ---    |                                    |   | 0.5                                      |   |   | (0.5 | ) |   | * |   |
| Net                  earnings (loss)                                            |   | $                                               | 25.0   |                                    | $      | (131.3                                   | ) | $ | 156.3 |   |   | * | % |

|                                                                              |   | **Percentage                    of Net Sales** |   |                                        |   |                                       |
|-----------------------------------------------------------------------------------|--------|------------------------------------------------|--------|---------------------------------------------|--------|--------------------------------------------|
|                                                                              |   | **Third                    Quarter Ended**     |   | **Change in                    Percentage** |   |
|                                                                              |   | **Oct.                    1,**                 |   | **Oct.                    2,**              |   | **Third                    Quarter 2005**  |   |
|                                                                              |   | **2005**                                       |   | **2004                    (1)**             |   | **as                    Compared to 2004** |   |
| Net                    sales                                                      |   |                                           | 100.0  | %                                           |   | 100.0                                      | % |   | --- | % |
| Cost                    of products sold                                          |   |                                           | 69.1   |                                        |   | 71.8                                       |   |   | 2.7 |   |
| Selling,                    general and administrative expenses, net              |   |                                           | 17.2   |                                        |   | 17.3                                       |   |   | 0.1 |   |
| Amortization                    of intangible assets                              |   |                                           | 0.8    |                                        |   | 0.8                                        |   |   | --- |   |
| Expenses                    and charges arising from the Acquisition              |   |                                           | ---    |                                        |   | 19.6                                       |   |   | 19.6 |   |
| Operating                    earnings (loss)                                      |   |                                           | 12.9   |                                        |   | (9.5                                       | ) |   | 22.4 |   |
| Interest                    expense                                               |   |                                           | (5.1   | )                                           |   | (6.6                                       | ) |   | 1.5 |   |
| Loss                    from debt retirement                                      |   |                                           | ---    |                                        |   | (27.8                                      | ) |   | 27.8 |   |
| Investment                    income                                              |   |                                           | 0.1    |                                        |   | 0.1                                        |   |   | --- |   |
| Earnings                    (loss) from continuing operations                     |   |                                           |   |                                        |   |                                       |   |   |   |   |
|                        before provision (benefit) for income taxes |   |                                           | 7.9    |                                        |   | (43.8                                      | ) |   | 51.7 |   |
| Provision                    (benefit) for income taxes                           |   |                                           | 3.1    |                                        |   | (13.0                                      | ) |   | (16.1 | ) |
| Earnings                    (loss) from continuing operations                     |   |                                           | 4.8    |                                        |   | (30.8                                      | ) |   | 35.6 |   |
| Earnings                    from discontinued operations                          |   |                                           | ---    |                                        |   | 0.1                                        |   |   | (0.1 | ) |
| Net                    earnings (loss)                                            |   |                                           | 4.8    | %                                           |   | (30.7                                      | )% |   | 35.5 | % |

| (1)    | The                third quarter ended October 2, 2004 represents the combined                Post-Acquisition and Pre-Acquisition periods of August 28, 2004 to                October                2, 2004 and July 4, 2004 to August 27, 2004,                respectively. |
|-----------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                         |   | **Post-Acquisition**                            |                                         | **Pre-Acquisition**                 |   | **Combined                  Nine**  |   |
|------------------------------------------------------------------------------|--------|-------------------------------------------------|----------------------------------------------|-------------------------------------|--------|-------------------------------------|--------|
|                                                                         |   | **Aug.                  28, 2004 -**            |                                         | **Jan.                  1, 2004 -** |   | **Months                  Ended**   |   |
|                                                                         |   | **Oct.                  2, 2004**               |                                         | **Aug.                  27, 2004**  |   | **Oct.                  2, 2004**   |   |
|                                                                         |   | *(Dollar                  amounts in millions)* |                                         |
|                                                                         |   | *(Unaudited)*                                   |                                         |
|                                                                         |   |                                            |                                         |                                |   |                                |   |
| Net                  sales                                                   |   | $                                               | 161.0                                        |                                | $      | 1,117.9                             |   | $ | 1,278.9 |   |
| Cost                  of products sold                                       |   |                                            | 115.9                                        |                                |   | 792.8                               |   |   | 908.7 |   |
| Selling,                  general and administrative expenses, net           |   |                                            | 28.2                                         |                                |   | 199.9                               |   |   | 228.1 |   |
| Amortization                  of intangible assets                           |   |                                            | 1.4                                          |                                |   | 8.9                                 |   |   | 10.3 |   |
| Expenses                  and charges arising from the Acquisition           |   |                                            | ---                                          |                                |   | 83.7                                |   |   | 83.7 |   |
| Operating                  earnings                                          |   |                                            | 15.5                                         |                                |   | 32.6                                |   |   | 48.1 |   |
| Interest                  expense                                            |   |                                            | (16.2                                        | )                                   |   | (56.1                               | )      |   | (72.3 | ) |
| Loss                  from debt retirement                                   |   |                                            | ---                                          |                                |   | (130.7                              | )      |   | (130.7 | ) |
| Investment                  income                                           |   |                                            | ---                                          |                                |   | 1.5                                 |   |   | 1.5 |   |
| Loss                    from continuing operations before income tax benefit |   |                                            | (0.7                                         | )                                   |   | (152.7                              | )      |   | (153.4 | ) |
| Income                  tax benefit                                          |   |                                            | (0.3                                         | )                                   |   | (41.4                               | )      |   | (41.7 | ) |
| Loss                  from continuing operations                             |   |                                            | (0.4                                         | )                                   |   | (111.3                              | )      |   | (111.7 | ) |
| Earnings                  from discontinued operations                       |   |                                            | ---                                          |                                |   | 67.4                                |   |   | 67.4 |   |
| Net                  loss                                                    |   | $                                               | (0.4                                         | )                                   | $      | (43.9                               | )      | $ | (44.3 | ) |
|                                                                         |   |                                            |                                         |                                |   |                                |   |   |   |   |
|                                                                              |   |                                            | **Percentage                  of Net Sales** |                                |
|                                                                              |   |                                            | **Post-Acquisition**                         |                                |   | **Pre-Acquisition**                 |   |   | **Combined                  Nine** |   |
|                                                                              |   |                                            | **Aug.                  28, 2004 -**         |                                |   | **Jan.                  1, 2004 -** |   |   | **Months                  Ended** |   |
|                                                                         |   |                                            | **Oct.                  2, 2004**            |                                |   | **Aug.                  27, 2004**  |   |   | **Oct.                  2, 2004** |   |
|                                                                         |   |                                            |                                         |                                |   |                                |   |   |   |   |
| Net                  sales                                                   |   |                                            | 100.0                                        | %                                   |   | 100.0                               | %      |   | 100.0 | % |
| Cost                  of products sold                                       |   |                                            | 72.0                                         |                                |   | 70.9                                |   |   | 71.1 |   |
| Selling,                  general and administrative expenses, net           |   |                                            | 17.5                                         |                                |   | 17.9                                |   |   | 17.8 |   |
| Amortization                  of intangible assets                           |   |                                            | 0.9                                          |                                |   | 0.8                                 |   |   | 0.8 |   |
| Expenses                  and charges arising from the Acquisition           |   |                                            | ---                                          |                                |   | 7.5                                 |   |   | 6.5 |   |
| Operating                  earnings                                          |   |                                            | 9.6                                          |                                |   | 2.9                                 |   |   | 3.8 |   |
| Interest                  expense                                            |   |                                            | (10.0                                        | )                                   |   | (5.0                                | )      |   | (5.7 | ) |
| Loss                  from debt retirement                                   |   |                                            | ---                                          |                                |   | (11.7                               | )      |   | (10.2 | ) |
| Investment                  income                                           |   |                                            | ---                                          |                                |   | 0.1                                 |   |   | 0.1 |   |
| Loss                    from continuing operations before income tax benefit |   |                                            | (0.4                                         | )                                   |   | (13.7                               | )      |   | (12.0 | ) |
| Income                  tax benefit                                          |   |                                            | (0.2                                         | )                                   |   | (3.7                                | )      |   | (3.3 | ) |
| Loss                  from continuing operations                             |   |                                            | (0.2                                         | )                                   |   | (10.0                               | )      |   | (8.7 | ) |
| Earnings                  from discontinued operations                       |   |                                            | ---                                          |                                |   | 6.0                                 |   |   | 5.2 |   |
| Net                  loss                                                    |   |                                            | (0.2                                         | )%                                  |   | (4.0                                | )%     |   | (3.5 | )% |

|                                                                            |   |                                            |    |                                        |   | **Change                  in Earnings**  |
|---------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|---------------------------------------------|--------|------------------------------------------|
|                                                                            |   | **First                  Nine Months Ended**    |    | **First                  Nine Months 2005** |
|                                                                            |   | **Oct.                  1,**                    |    | **Oct.                  2,**                |   | **as                  Compared to 2004** |
|                                                                            |   | **2005**                                        |    | **2004                  (1)**               |   | $                                   |   | % |
|                                                                            |   | *(Dollar                  amounts in millions)* |
|                                                                            |   |                                            |    |                                        |   |                                     |   |   |   |
| Net                  sales                                                      |   | $                                               | 1,455.8 |                                        | $      | 1,278.9                                  |   | $ | 176.9 |   |   | 13.8 | % |
| Cost                  of products sold                                          |   |                                            | 1,021.1 |                                        |   | 908.7                                    |   |   | (112.4 | ) |   | (12.4 | ) |
| Selling,                  general and administrative expenses, net              |   |                                            | 254.1   |                                        |   | 228.1                                    |   |   | (26.0 | ) |   | (11.4 | ) |
| Amortization                  of intangible assets                              |   |                                            | 13.1    |                                        |   | 10.3                                     |   |   | (2.8 | ) |   | (27.2 | ) |
| Expenses                  and charges arising from the Acquisition              |   |                                            | ---     |                                        |   | 83.7                                     |   |   | 83.7 |   |   | * |   |
| Operating                  earnings                                             |   |                                            | 167.5   |                                        |   | 48.1                                     |   |   | 119.4 |   |   | * |   |
| Interest                  expense                                               |   |                                            | (76.0   | )                                           |   | (72.3                                    | ) |   | (3.7 | ) |   | (5.1 | ) |
| Loss                  from debt retirement                                      |   |                                            | ---     |                                        |   | (130.7                                   | ) |   | 130.7 |   |   | * |   |
| Investment                  income                                              |   |                                            | 1.1     |                                        |   | 1.5                                      |   |   | (0.4 | ) |   | (26.7 | ) |
| Earnings                  (loss) from continuing operations                     |   |                                            |    |                                        |   |                                     |   |   |   |   |   |   |   |
|                      before provision (benefit) for income taxes |   |                                            | 92.6    |                                        |   | (153.4                                   | ) |   | 246.0 |   |   | * |   |
| Provision                  (benefit) for income taxes                           |   |                                            | 35.6    |                                        |   | (41.7                                    | ) |   | (77.3 | ) |   | * |   |
| Earnings                  (loss) from continuing operations                     |   |                                            | 57.0    |                                        |   | (111.7                                   | ) |   | 168.7 |   |   | * |   |
| Earnings                  from discontinued operations                          |   |                                            | ---     |                                        |   | 67.4                                     |   |   | (67.4 | ) |   | * |   |
| Net                  earnings (loss)                                            |   | $                                               | 57.0    |                                        | $      | (44.3                                    | ) | $ | 101.3 |   |   | * | % |

|                                                                                    |   | **Percentage                    of Net Sales** |   |                                        |   |                                          |   |
|-----------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|---------------------------------------------|--------|-----------------------------------------------|--------|
|                                                                                    |   | **First                    Nine Months Ended** |   | **Change                    in Percentage** |   |                                          |
|                                                                                    |   | **Oct.                    1,**                 |   | **Oct.                    2,**              |   | **First                    Nine Months 2005** |   |   |
|                                                                                    |   | **2005**                                       |   | **2004                    (1)**             |   | **as                    Compared to 2004**    |   |   |
|                                                                                    |   |                                           |   |                                        |   |                                          |   |   |   |
| Net                    sales                                                            |   |                                           | 100.0  | %                                           |   | 100.0                                         | %      |   | --- | % |
| Cost                    of products sold                                                |   |                                           | 70.1   |                                        |   | 71.1                                          |   |   | 1.0 |   |
| Selling,                    general and administrative expenses, net                    |   |                                           | 17.5   |                                        |   | 17.8                                          |   |   | 0.3 |   |
| Amortization                    of intangible assets                                    |   |                                           | 0.9    |                                        |   | 0.8                                           |   |   | (0.1 | ) |
| Expenses                    and charges arising from the Acquisition                    |   |                                           | ---    |                                        |   | 6.5                                           |   |   | 6.5 |   |
| Operating                    earnings                                                   |   |                                           | 11.5   |                                        |   | 3.8                                           |   |   | 7.7 |   |
| Interest                    expense                                                     |   |                                           | (5.2   | )                                           |   | (5.7                                          | )      |   | 0.5 |   |
| Loss                    from debt retirement                                            |   |                                           | ---    |                                        |   | (10.2                                         | )      |   | 10.2 |   |
| Investment                    income                                                    |   |                                           | 0.1    |                                        |   | 0.1                                           |   |   | --- |   |
| Earnings                    (loss) from continuing operations                           |   |                                           |   |                                        |   |                                          |   |   |   |   |
|                         before provision (benefit) for income taxes |   |                                           | 6.4    |                                        |   | (12.0                                         | )      |   | 18.4 |   |
| Provision                    (benefit) for income taxes                                 |   |                                           | 2.5    |                                        |   | (3.3                                          | )      |   | (5.8 | ) |
| Earnings                    (loss) from continuing operations                           |   |                                           | 3.9    |                                        |   | (8.7                                          | )      |   | 12.6 |   |
| Earnings                    from discontinued operations                                |   |                                           | ---    |                                        |   | 5.2                                           |   |   | (5.2 | ) |
| Net                    earnings (loss)                                                  |   |                                           | 3.9    | %                                           |   | (3.5                                          | )%     |   | 7.4 | % |

|                                                                                                                 |   | **For                  the Periods**      |   |
|----------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                                                                                 |   | **Post-Acquisition**                      |   | **Pre-Acquisition** |   |
|                                                                                                                 |   | **July                  3, 2005 -**       |   | **Aug.                  28, 2004 -** |   | **July                  4, 2004 -** |   |
|                                                                                                                 |   | **Oct.                  1, 2005**         |   | **Oct.                  2, 2004** |   | **Aug.                  27, 2004** |   |
|                                                                                                                 |   | *(Amounts                  in thousands)* |   |
|                                                                                                                 |   | *(Unaudited)*                             |   |
|                                                                                                                 |   |                                      |   |   |   |   |   |
| Net                  earnings (loss)*                                                                                |   | $                                         | 25,000 |   | $ | (400 | ) | $ | (130,900 | ) |
|                      Provision (benefit) for income taxes from continuing                  operations |   |                                      | 16,300 |   |   | (300 | ) |   | (55,200 | ) |
|                        Benefit from income taxes from                    discontinued operations      |   |                                      | ---    |   |   | --- |   |   | (2,000 | ) |
|                      Interest expense from continuing operations                                      |   |                                      | 26,544 |   |   | 16,197 |   |   | 12,092 |   |
|                      Interest expense from discontinued operations                                    |   |                                      | ---    |   |   | --- |   |   | 12 |   |
|                      Investment income from continuing operations                                     |   |                                      | (264   | ) |   | (32 | ) |   | (241 | ) |
|                      Investment income from discontinued operations                                   |   |                                      | ---    |   |   | --- |   |   | (18 | ) |
|                      Depreciation expense from continuing operations                                  |   |                                      | 6,876  |   |   | 2,524 |   |   | 3,939 |   |
|                      Depreciation expense from discontinued operations                                |   |                                      | ---    |   |   | --- |   |   | 8 |   |
|                      Amortization expense from continuing operations                                  |   |                                      | 4,760  |   |   | 3,783 |   |   | 2,022 |   |
| EBITDA                                                                                                               |   | $                                         | 79,216 |   | $ | 21,772 |   | $ | (170,286 | ) |

|   | * | EBITDA                includes approximately $100,000, $30,000 and $45,200,000 of stock-based                compensation charges recorded in the third quarter ended October                1, 2005                and the periods from August 28, 2004 to October 2, 2004 and from                July 4,                2004 to August 27, 2004, respectively (see Notes A and G of the Notes                to                the Unaudited Condensed Consolidated Financial Statements included                elsewhere herein). |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                     |   | **For                  the Periods**      |    |
|--------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|---------|
|                                                                                                                     |   | **Post-Acquisition**                      |    | **Pre-Acquisition** |   |
|                                                                                                                     |   | **Jan.                  1, 2005 -**       |    | **Aug.                  28, 2004 -** |   | **Jan.                  1, 2004 -** |   |
|                                                                                                                     |   | **Oct.                  1, 2005**         |    | **Oct.                  2, 2004** |   | **Aug.                  27, 2004** |   |
|                                                                                                                     |   | *(Amounts                  in thousands)* |    |
|                                                                                                                     |   | *(Unaudited)*                             |    |
|                                                                                                                     |   |                                      |    |   |   |   |   |
| Net                  earnings *                                                                                          |   | $                                         | 57,000  |   | $ | (400 | ) | $ | (43,900 | ) |
|                        Provision (benefit) for income taxes from                    continuing operations |   |                                      | 35,600  |   |   | (300 | ) |   | (41,400 | ) |
|                        Provision for income taxes from                    discontinued operations         |   |                                      | ---     |   |   | --- |   |   | 45,500 |   |
|                      Interest expense from continuing operations                                          |   |                                      | 75,973  |   |   | 16,197 |   |   | 56,073 |   |
|                      Interest expense from discontinued operations                                        |   |                                      | ---     |   |   | --- |   |   | 4,609 |   |
|                      Investment income from continuing operations                                         |   |                                      | (1,026  | ) |   | (32 | ) |   | (1,520 | ) |
|                      Investment income from discontinued operations                                       |   |                                      | ---     |   |   | --- |   |   | (52 | ) |
|                      Depreciation expense from continuing operations                                      |   |                                      | 20,434  |   |   | 2,524 |   |   | 16,731 |   |
|                      Depreciation expense from discontinued operations                                    |   |                                      | ---     |   |   | --- |   |   | 1,210 |   |
|                      Amortization expense from continuing operations                                      |   |                                      | 13,909  |   |   | 3,783 |   |   | 9,092 |   |
|                      Amortization expense from discontinued operations                                    |   |                                      | ---     |   |   | --- |   |   | 203 |   |
| EBITDA                                                                                                                   |   | $                                         | 201,890 |   | $ | 21,772 |   | $ | 46,546 |   |

|   | * | EBITDA                includes approximately $300,000, $30,000 and $48,500,000 of stock-based                compensation charges recorded in the first nine months ended October                1,                2005 and the periods from August 28, 2004 to October 2, 2004 and                from                January 1, 2004 to August 27, 2004, respectively (see Notes A and                G of the                Notes to the Unaudited Condensed Consolidated Financial Statements                included elsewhere herein). |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Liquidity      and Capital Resources**

| ·   | On                August 26, 2005, the Company acquired the assets of Sunfire for                approximately $4,000,000 (utilizing approximately $3,500,000 of cash                on                hand and issuing an unsecured subordinated promissory note in the                amount                of approximately $500,000) plus contingent consideration. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                August 8, 2005, the Company acquired the stock of Imerge for approximately                $6,000,000 in cash plus contingent                consideration. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                July 15, 2005, the Company acquired the assets and certain liabilities                of                Niles for approximately $76,500,000, utilizing approximately $41,500,000                of cash on hand, borrowing approximately $25,000,000 against the                U.S.                portion of its revolving credit facility (which was subsequently                repaid                during the third quarter of 2005) and issuing an unsecured promissory                note                in the amount of approximately                $10,000,000. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                June 13, 2005, the Company, through its wholly-owned subsidiary Nordyne,                acquired IMS for approximately $4,600,000, utilizing approximately                $4,100,000 of cash on hand and issuing an unsecured promissory note                in the                amount of approximately $500,000. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                April 26, 2005, the Company, through its indirect wholly-owned subsidiary,                Linear, acquired Panamax for approximately $11,850,000 (utilizing                approximately $9,600,000 of cash on hand and issuing an unsecured                promissory note in the amount of approximately $2,250,000) plus contingent                consideration. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                            |   | **Condensed                  Consolidated Cash Flows (*)** |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------|---------|
|                                                                                                                                                                            |   | **For                  the Periods**                       |    |
|                                                                                                                                                                            |   | **Post-Acquisition**                                       |    | **Pre-Acquisition** |   |
|                                                                                                                                                                            |   | **Jan.                  1, 2005 -**                        |    | **Aug.                  28, 2004 -** |   | **Jan.                  1, 2004 -** |   |
|                                                                                                                                                                            |   | **Oct.                  1, 2005**                          |    | **Oct.                  2, 2004** |   | **Aug.                  27, 2004** |   |
|                                                                                                                                                                            |   | *(Amounts                  in thousands)*                  |    |
| **Operating                  Activities:**                                                                                                                                      |   |                                                       |    |   |   |   |   |
|                       Cash flow from operations, net                                                                                                        |   | $                                                          | 118,160 |   | $ | 6,326 |   | $ | 90,414 |   |
|                       Increase in accounts receivable, net                                                                                                  |   |                                                       | (64,462 | ) |   | (1,347 | ) |   | (26,921 | ) |
|                       Increase in inventories                                                                                                               |   |                                                       | (11,633 | ) |   | (5,907 | ) |   | (34,337 | ) |
|                       (Increase) / decrease in prepaids and other current assets                                                                            |   |                                                       | (8,197  | ) |   | 17,853 |   |   | (14,363 | ) |
|                       Decrease in net assets of discontinued operations                                                                                     |   |                                                       | ---     |   |   | --- |   |   | 2,326 |   |
|                       Increase / (decrease) in accounts payable                                                                                             |   |                                                       | 32,849  |   |   | (15,274 | ) |   | 52,669 |   |
|                       (Decrease) / increase in accrued expenses and taxes                                                                                   |   |                                                       | (3,060  | ) |   | 14,768 |   |   | (33,926 | ) |
| **Investing                  Activities:**                                                                                                                                      |   |                                                       |    |   |   |   |   |   |   |   |
|                       Capital expenditures                                                                                                                  |   |                                                       | (15,020 | ) |   | (2,620 | ) |   | (11,848 | ) |
|                       Net cash paid for businesses acquired                                                                                                 |   |                                                       | (88,800 | ) |   | --- |   |   | (16,500 | ) |
|                       Purchase of outstanding equity shares of the Company by Thomas                  H. Lee                  Partners, L.P. and affiliates |   |                                                       | ---     |   |   | (706,189 | ) |   | --- |   |
|                       Purchase of investments and marketable securities                                                                                     |   |                                                       | ---     |   |   | --- |   |   | (5,000 | ) |
|                        Proceeds from the sale of investments and marketable                    securities                                                        |   |                                                       | ---     |   |   | --- |   |   | 5,000 |   |
|                       Payment of Acquisition fees and expenses                                                                                              |   |                                                       | ---     |   |   | (57,000 | ) |   | --- |   |
|                       Proceeds from the sale of discontinued businesses                                                                                     |   |                                                       | ---     |   |   | --- |   |   | 526,000 |   |
|                       Proceeds from the sale of property and equipment                                                                                      |   |                                                       | 6,144   |   |   | --- |   |   | --- |   |
|      Change                  in restricted cash and investments                                                                                        |   |                                                       | (2,070  | ) |   | 1 |   |   | (103 | ) |
| **Financing                  Activities:**                                                                                                                                      |   |                                                       |    |   |   |   |   |   |   |   |
|                        Change in borrowings, net                                                                                                       |   |                                                       | (6,305  | ) |   | (484 | ) |   | (5,370 | ) |
|                        Sale of Floating Rate Notes                                                                                                     |   |                                                       | ---     |   |   | --- |   |   | 196,000 |   |
|      Redemption                  of notes in connection with the Acquisition                                                                           |   |                                                       | ---     |   |   | (919,300 | ) |   | --- |   |
|                       Redemption of Senior Notes                                                                                                            |   |                                                       | ---     |   |   | --- |   |   | (716,700 | ) |
|                       Net proceeds from the sale of the 8 1/2% Notes                                                                                        |   |                                                       | ---     |   |   | 605,400 |   |   | --- |   |
|                       Net proceeds from borrowings under the Senior Secured Credit                  facility                                                |   |                                                       | ---     |   |   | 685,350 |   |   | --- |   |
|                         Equity investment by Thomas H. Lee Partners, L.P. and                    affiliates                                                 |   |                                                       | ---     |   |   | 361,841 |   |   | --- |   |
|                       Settlement of stock options                                                                                                           |   |                                                       | ---     |   |   | (113,032 | ) |   | --- |   |
| Other,                  net                                                                                                                                                     |   |                                                       | (5,572  | ) |   | (1,649 | ) |   | 489 |   |
|                                                                                                                                                                            |   | $                                                          | (47,966 | ) | $ | (131,263 | ) | $ | 7,830 |   |

|  | (*) | Summarized                from the Company’s Unaudited Condensed Consolidated Statement of Cash                Flows for the nine months ended October 1, 2005 and the periods from                August 28, 2004 to October 2, 2004 and from January 1, 2004 to August                27,                2004 (see the Unaudited Financial Statements included elsewhere                herein). |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                             |   | **For                  the Periods**      |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|---------|
|                                                                                                                                                             |   | **Post-Acquisition**                      |    | **Pre-Acquisition** |   |
|                                                                                                                                                             |   | **Jan.                  1, 2005 -**       |    | **Aug.                  28, 2004 -** |   | **Jan.                  1, 2004 -** |   |
|                                                                                                                                                             |   | **Oct.                  1, 2005**         |    | **Oct.                  2, 2004** |   | **Aug.                  27, 2004** |   |
|                                                                                                                                                             |   | *(Amounts                  in thousands)* |    |
|                                                                                                                                                             |   | *(Unaudited)*                             |    |
|                                                                                                                                                             |   |                                      |    |   |   |   |   |
|                      Net cash provided by operating activities *                                                                                  |   | $                                         | 59,777  |   | $ | 14,747 |   | $ | 36,697 |   |
|                      Cash used in (provided by) working capital and other long-term                  asset and                  liability changes |   |                                      | 58,383  |   |   | (8,421 | ) |   | 53,717 |   |
|                      Non-cash interest expense, net                                                                                               |   |                                      | (4,089  | ) |   | (389 | ) |   | (24,671 | ) |
|                      Effect of the Acquisition, net                                                                                               |   |                                      | ---     |   |   | --- |   |   | (38,423 | ) |
|                      Non-cash stock-based compensation                                                                                            |   |                                      | (248    | ) |   | (30 | ) |   | (48,561 | ) |
|                      Loss from debt retirement                                                                                                    |   |                                      | ---     |   |   | --- |   |   | (130,736 | ) |
|                      Gain on the sale of discontinued operations                                                                                  |   |                                      | ---     |   |   | --- |   |   | 125,200 |   |
|                      Gain on sale of fixed assets                                                                                                 |   |                                      | 220     |   |   | --- |   |   | --- |   |
|                      Deferred federal income tax provision from continuing                  operations                                            |   |                                      | (22,700 | ) |   | --- |   |   | (9,800 | ) |
|                      Deferred federal income tax credit from discontinued                  operations                                             |   |                                      | ---     |   |   | --- |   |   | 18,500 |   |
|                      Provision (benefit) for income taxes from continuing                  operations                                             |   |                                      | 35,600  |   |   | (300 | ) |   | (41,400 | ) |
|                      Provision for income taxes from discontinued operations                                                                      |   |                                      | ---     |   |   | --- |   |   | 45,500 |   |
|                      Interest expense from continuing operations                                                                                  |   |                                      | 75,973  |   |   | 16,197 |   |   | 56,073 |   |
|                      Interest expense from discontinued operations                                                                                |   |                                      | ---     |   |   | --- |   |   | 4,609 |   |
|                      Investment income from continuing operations                                                                                 |   |                                      | (1,026  | ) |   | (32 | ) |   | (1,520 | ) |
|                      Investment income from discontinued operations                                                                               |   |                                      | ---     |   |   | --- |   |   | (52 | ) |
|                      Depreciation expense from discontinued operations                                                                            |   |                                      | ---     |   |   | --- |   |   | 1,210 |   |
|                      Amortization expense from discontinued operations                                                                            |   |                                      | ---     |   |   | --- |   |   | 203 |   |
| EBITDA                                                                                                                                                           |   | $                                         | 201,890 |   | $ | 21,772 |   | $ | 46,546 |   |

|   | * | EBITDA                includes approximately $300,000, $30,000 and $48,500,000 of stock-based                compensation charges recorded in the first nine months ended October                1,                2005 and the periods from August 28, 2004 to October 2, 2004 and                from                January 1, 2004 to August 27, 2004, respectively (see Notes A and                G of the                Notes to the Unaudited Condensed Consolidated Financial Statements                included elsewhere herein). |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Inflation,      Trends and General Considerations**

**Market      Risk**

**A.**
**Interest      Rate Risk**

**B.**
**Foreign      Currency Risk**

**C.**
**Commodity      Pricing Risk**

**Forward-Looking      Statements**

**Item      3.**
**Quantitative      and Qualitative Disclosures about Market Risk**

**Item      4.**
**Controls      and Procedures**

**PART      II. OTHER INFORMATION**

**Item      4.**
**Submission      of Matters to a Vote of Security Holders**

**Item      5.**
**Other      Information**

**Item      6.**
**Exhibits      **

| *      | 31.1   | Certificate                of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                            |
| *      | 31.2   | Certificate                of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002. |
|   |   |                                                                                                                            |

|                   |   |  NORTEK, INC.                                    |
|------------------------|--------|-------------------------------------------------------|
|                   |   |  (Registrant)                                    |
|                   |   |                                                  |
|                   |   |                                                  |
|                   |   |                                                  |
|                   |   |                                                  |
|                   |   |  /s/ Almon C.              Hall   |
|                   |   |  Almon C. Hall,                                  |
|                   |   |  Vice President and Chief                        |
|                   |   |  Financial Officer                               |
|                   |   |                                                  |
|                   |   |                                                  |
|                   |   |                                                  |
|  November 7, 2005 |   |                                                  |
|                   |   |                                                  |