**UNITED        STATES SECURITIES AND EXCHANGE COMMISSION**

**Form        10-Q**

**For        the quarterly period ended June 30, 2007**

**333-119902**

| **Nortek,                  Inc.**                                                                                 |
|-------------------------------------------------------------------------------------------------------------------|
| (exact                  name of registrant as specified in its charter)                                           |
|                                                                                                              |   |
| **Delaware**                                                                                                      | **05-0314991** |
| (State                  or other jurisdiction of incorporation or organization)                                   | (IRS                  Employer Identification Number) |
|                                                                                                              |   |
| **50                  Kennedy Plaza****Providence,                  Rhode Island**                                |  **02903-2360** |
| (Address                  of principal executive offices)                                                         | (zip                  code) |
|                                                                                                              |   |
| Registrant’s                  Telephone Number, Including Area Code:**(401)                  751-1600**     |
|                                                                                                              |
| Securities                  registered pursuant to Section 12(b) of the                  Act:  **None** |

| Large                  accelerated filer [_] | Accelerated                  Filer [_] | Non-accelerated                  filer [X] |
|----------------------------------------------|----------------------------------------|--------------------------------------------|

**PART        I – FINANCIAL INFORMATION**

**Item        1.  Financial Statements**

**NORTEK,        INC. AND SUBSIDIARIES**

**UNAUDITED        CONDENSED CONSOLIDATED BALANCE SHEET**

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

|                                                                                                                                                 |   | **June                  30,** |    |   | **December                  31,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|---------|--------|-----------------------------------|--------|
|                                                                                                                                                 |   | **2007**                      |    |   | **2006**                          |   |
| **Assets**                                                                                                                                           |   |                          |    |   |                              |   |
| **Current                  Assets:**                                                                                                                 |   |                          |    |   |                              |   |
| Unrestricted                  cash and cash equivalents                                                                                              |   | $                             | 75.3    |   |                              | $      | 57.4 |   |
| Restricted                  cash                                                                                                                     |   |                          | 1.3     |   |                              |   | 1.2 |   |
| Accounts                    receivable, less allowances of                    $12.9 and                    $9.4                                      |   |                          | 384.4   |   |                              |   | 328.9 |   |
| Inventories:                                                                                                                                         |   |                          |    |   |                              |   |   |   |
|                     Raw materials                                                                                                          |   |                          | 93.0    |   |                              |   | 83.1 |   |
|                     Work in process                                                                                                        |   |                          | 33.6    |   |                              |   | 28.7 |   |
|                     Finished goods                                                                                                         |   |                          | 193.6   |   |                              |   | 166.8 |   |
|                                                                                                                                                 |   |                          | 320.2   |   |                              |   | 278.6 |   |
|                                                                                                                                                 |   |                          |    |   |                              |   |   |   |
| Prepaid                  expenses                                                                                                                    |   |                          | 13.5    |   |                              |   | 13.7 |   |
| Other                  current                  assets                                                                                               |   |                          | 11.4    |   |                              |   | 24.4 |   |
| Prepaid                  income taxes                                                                                                                |   |                          | 30.2    |   |                              |   | 21.2 |   |
|                     Total current assets                                                                                                   |   |                          | 836.3   |   |                              |   | 725.4 |   |
|                                                                                                                                                 |   |                          |    |   |                              |   |   |   |
| **Property                  and Equipment, at Cost:**                                                                                                |   |                          |    |   |                              |   |   |   |
| Land                                                                                                                                                 |   |                          | 9.9     |   |                              |   | 9.5 |   |
| Buildings                  and                  improvements                                                                                         |   |                          | 104.1   |   |                              |   | 101.9 |   |
| Machinery                  and                  equipment                                                                                            |   |                          | 192.8   |   |                              |   | 177.2 |   |
|                                                                                                                                                 |   |                          | 306.8   |   |                              |   | 288.6 |   |
| Less                  accumulated depreciation                                                                                                       |   |                          | 84.4    |   |                              |   | 66.1 |   |
|                     Total property and equipment, net                                                                                      |   |                          | 222.4   |   |                              |   | 222.5 |   |
|                                                                                                                                                 |   |                          |    |   |                              |   |   |   |
| **Other                  Assets:**                                                                                                                   |   |                          |    |   |                              |   |   |   |
| Goodwill                                                                                                                                             |   |                          | 1,509.3 |   |                              |   | 1,481.4 |   |
| Intangible                    assets, less accumulated amortization of                    $65.2 and                    $52.4                         |   |                          | 142.0   |   |                              |   | 150.4 |   |
| Deferred                  debt                  expense                                                                                              |   |                          | 30.2    |   |                              |   | 33.1 |   |
| Restricted                  investments and marketable securities                                                                                    |   |                          | 2.0     |   |                              |   | 3.3 |   |
| Other                  assets                                                                                                                        |   |                          | 12.7    |   |                              |   | 11.2 |   |
|                                                                                                                                                 |   |                          | 1,696.2 |   |                              |   | 1,679.4 |   |
| **Total                  Assets**                                                                                                                    |   | $                             | 2,754.9 |   |                              | $      | 2,627.3 |   |
|                                                                                                                                                 |   |                          |    |   |                              |   |   |   |
| **Liabilities                  and Stockholder’s Investment**                                                                                  |   |                          |    |   |                              |   |   |   |
|                                                                                                                                                 |   |                          |    |   |                              |   |   |   |
| **Current                  Liabilities:**                                                                                                            |   |                          |    |   |                              |   |   |   |
| Notes                  payable                  and other short-term obligations                                                                     |   | $                             | 99.4    |   |                              | $      | 23.3 |   |
| Current                  maturities of long-term debt                                                                                                |   |                          | 26.9    |   |                              |   | 20.0 |   |
| Accounts                  payable                                                                                                                    |   |                          | 243.8   |   |                              |   | 188.2 |   |
| Accrued                  expenses and taxes, net                                                                                                     |   |                          | 235.0   |   |                              |   | 282.8 |   |
|                     Total current liabilities                                                                                              |   |                          | 605.1   |   |                              |   | 514.3 |   |
|                                                                                                                                                 |   |                          |    |   |                              |   |   |   |
| **Other                  Liabilities:**                                                                                                              |   |                          |    |   |                              |   |   |   |
| Deferred                  income taxes                                                                                                               |   |                          | 29.2    |   |                              |   | 33.9 |   |
| Long-term                  payable to affiliate                                                                                                      |   |                          | 30.0    |   |                              |   | 24.9 |   |
| Other                                                                                                                                                |   |                          | 144.5   |   |                              |   | 128.8 |   |
|                                                                                                                                                 |   |                          | 203.7   |   |                              |   | 187.6 |   |
|                                                                                                                                                 |   |                          |    |   |                              |   |   |   |
| **Notes,                    Mortgage Notes and Obligations**Payable,                    Less                    Current Maturities                   |   |                          | 1,349.6 |   |                              |   | 1,362.3 |   |
|                                                                                                                                                 |   |                          |    |   |                              |   |   |   |
| **Stockholder’s                  Investment:**                                                                                                 |   |                          |    |   |                              |   |   |   |
| Common                    stock,                    $0.01 par value, authorized 3,000 shares; 3,000                    issued                    and |   |
|                     outstanding at June 30, 2007 and December 31, 2006                                                                     |   |                          | ---     |   |                              |   | --- |   |
| Additional                  paid-in capital                                                                                                          |   |                          | 412.3   |   |                              |   | 412.1 |   |
| Retained                  earnings                                                                                                                   |   |                          | 164.1   |   |                              |   | 139.4 |   |
| Accumulated                  other comprehensive income                                                                                              |   |                          | 20.1    |   |                              |   | 11.6 |   |
|                     Total stockholder's investment                                                                                         |   |                          | 596.5   |   |                              |   | 563.1 |   |
| **Total                  Liabilities and Stockholder's Investment**                                                                                  |   | $                             | 2,754.9 |   |                              | $      | 2,627.3 |   |

*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 second quarter ended** |   |
|------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                                                                             |   | **June                    30, 2007**                |   |   | **July                    1, 2006** |   |
|                                                                                                             |   | *(Dollar                    amounts in millions)*   |   |
|                                                                                                             |   |                                                |   |   |   |   |
| **Net                    Sales**                                                                                 |   | $                                                   | 644.3  |   |   | $ | 563.8 |   |
|                                                                                                             |   |                                                |   |   |   |   |   |   |
| **Costs                    and Expenses:**                                                                       |   |                                                |   |   |   |   |   |   |
|                       Cost of products sold                                                            |   |                                                | 452.1  |   |   |   | 393.7 |   |
|                       Selling, general and administrative expense, net (see Note                    D) |   |                                                | 121.1  |   |   |   | 67.3 |   |
|    Amortization                    of intangible assets                                           |   |                                                | 6.4    |   |   |   | 5.8 |   |
|                                                                                                             |   |                                                | 579.6  |   |   |   | 466.8 |   |
| Operating                    earnings                                                                            |   |                                                | 64.7   |   |   |   | 97.0 |   |
| Interest                    expense                                                                              |   |                                                | (30.8  | ) |   |   | (28.0 | ) |
| Investment                    income                                                                             |   |                                                | 0.5    |   |   |   | 0.5 |   |
| Earnings                    before provision for income taxes                                                    |   |                                                | 34.4   |   |   |   | 69.5 |   |
| Provision                    for                    income taxes                                                 |   |                                                | 15.7   |   |   |   | 26.4 |   |
| **Net                    earnings**                                                                              |   | $                                                   | 18.7   |   |   | $ | 43.1 |   |

*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 first six months ended** |    |
|------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|---------|
|                                                                                                             |   | **June                    30, 2007**                  |    |   | **July                    1, 2006** |   |
|                                                                                                             |   | *(Dollar                    amounts in millions)*     |    |
|                                                                                                             |   |                                                  |    |   |   |   |
| **Net                    Sales**                                                                                 |   | $                                                     | 1,196.8 |   |   | $ | 1,098.3 |   |
|                                                                                                             |   |                                                  |    |   |   |   |   |   |
| **Costs                    and Expenses:**                                                                       |   |                                                  |    |   |   |   |   |   |
|                       Cost of products sold                                                            |   |                                                  | 836.7   |   |   |   | 764.2 |   |
|                       Selling, general and administrative expense, net (see Note                    D) |   |                                                  | 238.1   |   |   |   | 162.4 |   |
|                       Amortization of intangible assets                                                |   |                                                  | 12.4    |   |   |   | 10.0 |   |
|                                                                                                             |   |                                                  | 1,087.2 |   |   |   | 936.6 |   |
| Operating                    earnings                                                                            |   |                                                  | 109.6   |   |   |   | 161.7 |   |
| Interest                    expense                                                                              |   |                                                  | (60.0   | ) |   |   | (56.0 | ) |
| Investment                    income                                                                             |   |                                                  | 0.9     |   |   |   | 1.2 |   |
| Earnings                    before provision for income taxes                                                    |   |                                                  | 50.5    |   |   |   | 106.9 |   |
| Provision                    for                    income taxes                                                 |   |                                                  | 22.6    |   |   |   | 40.6 |   |
| **Net                    earnings**                                                                              |   | $                                                     | 27.9    |   |   | $ | 66.3 |   |

*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 first six months ended** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                                                                                                           |   | **June                    30, 2007**                  |   |   | **July                    1, 2006** |   |
|                                                                                                                                           |   | *(Dollar                    amounts in millions)*     |   |
| **Cash                    Flows from operating activities:**                                                                                   |   |                                                  |   |   |   |   |
| Net                    earnings                                                                                                                |   | $                                                     | 27.9   |   |   | $ | 66.3 |   |
|                                                                                                                                           |   |                                                  |   |   |   |   |   |   |
| **Adjustments                      to reconcile net earnings to net cash**provided by operating                      activities:               |   |                                                  |   |   |   |   |   |   |
| Depreciation                    and amortization expense                                                                                       |   |                                                  | 31.1   |   |   |   | 28.3 |   |
| Non-cash                    interest expense, net                                                                                              |   |                                                  | 2.8    |   |   |   | 2.5 |   |
| Non-cash                    stock-based compensation expense                                                                                   |   |                                                  | 0.2    |   |   |   | 0.2 |   |
| Gain                    from                    curtailment of post-retirement medical benefits                                                |   |                                                  | ---    |   |   |   | (35.9 | ) |
| Loss                    on                    property and equipment                                                                           |   |                                                  | 0.2    |   |   |   | 1.8 |   |
| Deferred                    federal income tax provision                                                                                       |   |                                                  | 4.1    |   |   |   | 7.4 |   |
| **Changes                      in certain assets and liabilities, net of**effects from                      acquisitions and dispositions:     |   |                                                  |   |   |   |   |   |   |
| Accounts                    receivable, net                                                                                                    |   |                                                  | (47.2  | ) |   |   | (28.5 | ) |
| Inventories                                                                                                                                    |   |                                                  | (33.7  | ) |   |   | (37.9 | ) |
| Prepaids                    and                    other current assets                                                                        |   |                                                  | 2.3    |   |   |   | 5.3 |   |
| Accounts                    payable                                                                                                            |   |                                                  | 49.5   |   |   |   | 27.4 |   |
| Accrued                    expenses and taxes                                                                                                  |   |                                                  | 9.7    |   |   |   | 18.3 |   |
| Long-term                    assets, liabilities and other, net                                                                                |   |                                                  | (0.8   | ) |   |   | 2.8 |   |
|                       Total adjustments to net earnings                                                                              |   |                                                  | 18.2   |   |   |   | (8.3 | ) |
|                       Net cash provided by operating activities                                                                      |   |                                                  | 46.1   |   |   |   | 58.0 |   |
| **Cash                    Flows from investing activities:**                                                                                   |   |                                                  |   |   |   |   |   |   |
| Capital                    expenditures                                                                                                        |   |                                                  | (14.1  | ) |   |   | (22.7 | ) |
| Net                    cash paid                    for businesses acquired                                                                    |   |                                                  | (76.3  | ) |   |   | (56.9 | ) |
| Payment                      in                      connection with NTK Holdings senior unsecured loan facility                      rollover |   |                                                  | (4.5   | ) |   |   | --- |   |
| Proceeds                    from                    the sale of property and equipment                                                         |   |                                                  | 0.1    |   |   |   | 2.6 |   |
| Change                    in                    restricted cash and marketable securities                                                      |   |                                                  | 1.2    |   |   |   | --- |   |
| Other,                    net                                                                                                                  |   |                                                  | (0.6   | ) |   |   | (2.6 | ) |
|                       Net cash used in investing activities                                                                          |   |                                                  | (94.2  | ) |   |   | (79.6 | ) |
| **Cash                    Flows from financing activities:**                                                                                   |   |                                                  |   |   |   |   |   |   |
| Increase                    in                    borrowings                                                                                   |   |                                                  | 89.0   |   |   |   | 68.9 |   |
| Payment                    of                    borrowings                                                                                    |   |                                                  | (23.0  | ) |   |   | (40.0 | ) |
| Dividends                                                                                                                                      |   |                                                  | ---    |   |   |   | (28.1 | ) |
| Other,                    net                                                                                                                  |   |                                                  | ---    |   |   |   | (1.5 | ) |
|                       Net cash provided by (used in) financing activities                                                            |   |                                                  | 66.0   |   |   |   | (0.7 | ) |
| Net                    change in                    unrestricted cash and cash equivalents                                                     |   |                                                  | 17.9   |   |   |   | (22.3 | ) |
| Unrestricted                    cash and cash equivalents at the beginning of the period                                                       |   |                                                  | 57.4   |   |   |   | 77.2 |   |
| Unrestricted                    cash and cash equivalents at the end of the period                                                             |   | $                                                     | 75.3   |   |   | $ | 54.9 |   |
|                                                                                                                                           |   |                                                  |   |   |   |   |   |   |
| **Supplemental                    disclosure of cash flow information:**                                                                       |   |                                                  |   |   |   |
|                                                                                                                                           |   |                                                  |   |   |   |   |   |   |
| Interest                    paid                                                                                                               |   | $                                                     | 52.8   |   |   | $ | 53.8 |   |
|                                                                                                                                           |   |                                                  |   |   |   |   |   |   |
| Income                    taxes                    (refunded) paid, net                                                                        |   | $                                                     | (0.4   | ) |   | $ | 14.4 |   |

*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 SECOND QUARTER ENDED JULY 1, 2006**

*(Dollar        amounts in millions)*

|                                                                              |   |           |   |   |         |   |   | **Accumulated**   |   |   |              |   |
|-----------------------------------------------------------------------------------|--------|----------------|--------|--------|--------------|--------|--------|-------------------|--------|--------|-------------------|--------|
|                                                                              |   | **Additional** |   |   |         |   |   | **Other**         |   |   |              |   |
|                                                                              |   | **Paid-in**    |   |   | **Retained** |   |   | **Comprehensive** |   |   | **Comprehensive** |   |
|                                                                              |   | **Capital**    |   |   | **Earnings** |   |   | **Income**        |   |   | **Income**        |   |
|                                                                              |   |           |   |   |         |   |   |              |   |   |              |   |
|                                                                              |   |           |   |   |         |   |   |              |   |   |              |   |
| **Balance,                    April 1, 2006**                                     |   | $              | 415.3  |   |         | $      | 101.0  |              |   | $      | 8.1               |   |   | $ | --- |   |
| Net                    earnings                                                   |   |           | ---    |   |         |   | 43.1   |              |   |   | ---               |   |   |   | 43.1 |   |
| Other                    comprehensive income:                                    |   |           |   |   |         |   |   |              |   |   |              |   |   |   |   |   |
|                       Currency translation adjustment                   |   |           | ---    |   |         |   | ---    |              |   |   | 6.3               |   |   |   | 6.3 |   |
| Comprehensive                    income                                           |   |           |   |   |         |   |   |              |   |   |              |   |   | $ | 49.4 |   |
| Capital                    contribution from (dividend to) parent                 |   |           | 1.5    |   |         |   | (28.1  | )                 |   |   | ---               |   |   |   |   |   |
| Adjustment                    of                    carryover basis of continuing |   |           |   |   |         |   |   |              |   |   |              |   |   |   |   |   |
|                       management investors in the THL Transaction       |   |           | (4.9   | )      |         |   | ---    |              |   |   | ---               |   |   |   |   |   |
| Stock-based                    compensation                                       |   |           | 0.1    |   |         |   | ---    |              |   |   | ---               |   |   |   |   |   |
| **Balance,                    July 1, 2006**                                      |   | $              | 412.0  |   |         | $      | 116.0  |              |   | $      | 14.4              |   |   |   |   |   |

*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 FIRST SIX MONTHS ENDED JULY 1, 2006**

*(Dollar        amounts in millions)*

|                                                                              |   |           |   |   |         |   |   | **Accumulated**   |   |   |              |   |
|-----------------------------------------------------------------------------------|--------|----------------|--------|--------|--------------|--------|--------|-------------------|--------|--------|-------------------|--------|
|                                                                              |   | **Additional** |   |   |         |   |   | **Other**         |   |   |              |   |
|                                                                              |   | **Paid-in**    |   |   | **Retained** |   |   | **Comprehensive** |   |   | **Comprehensive** |   |
|                                                                              |   | **Capital**    |   |   | **Earnings** |   |   | **Income**        |   |   | **Income**        |   |
|                                                                              |   |           |   |   |         |   |   |              |   |   |              |   |
|                                                                              |   |           |   |   |         |   |   |              |   |   |              |   |
| **Balance,                    December 31, 2005**                                 |   | $              | 415.0  |   |         | $      | 77.8   |              |   | $      | 7.5               |   |   | $ | --- |   |
| Net                    earnings                                                   |   |           | ---    |   |         |   | 66.3   |              |   |   | ---               |   |   |   | 66.3 |   |
| Other                    comprehensive income:                                    |   |           |   |   |         |   |   |              |   |   |              |   |   |   |   |   |
|                       Currency translation adjustment                   |   |           | ---    |   |         |   | ---    |              |   |   | 6.9               |   |   |   | 6.9 |   |
| Comprehensive                    income                                           |   |           |   |   |         |   |   |              |   |   |              |   |   | $ | 73.2 |   |
| Capital                    contribution from (dividend to) parent                 |   |           | 1.7    |   |         |   | (28.1  | )                 |   |   | ---               |   |   |   |   |   |
| Adjustment                    of                    carryover basis of continuing |   |           |   |   |         |   |   |              |   |   |              |   |   |   |   |   |
|                       management investors in the THL Transaction       |   |           | (4.9   | )      |         |   | ---    |              |   |   | ---               |   |   |   |   |   |
| Stock-based                    compensation                                       |   |           | 0.2    |   |         |   | ---    |              |   |   | ---               |   |   |   |   |   |
| **Balance,                    July 1, 2006**                                      |   | $              | 412.0  |   |         | $      | 116.0  |              |   | $      | 14.4              |   |   |   |   |   |

*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 SECOND QUARTER ENDED JUNE 30, 2007**

*(Dollar        amounts in millions)*

|                                                                  |   |           |   |   |         |   |   | **Accumulated**                      |   |   |                                 |   |
|-----------------------------------------------------------------------|--------|----------------|--------|--------|--------------|--------|--------|--------------------------------------|--------|--------|--------------------------------------|--------|
|                                                                  |   | **Additional** |   |   |         |   |   | **Other**                            |   |   |                                 |   |
|                                                                  |   | **Paid-in**    |   |   | **Retained** |   |   | **Comprehensive**                    |   |   | **Comprehensive**                    |   |
|                                                                  |   | **Capital**    |   |   | **Earnings** |   |   | **Income                    (Loss)** |   |   | **Income                    (Loss)** |   |
|                                                                  |   |           |   |   |         |   |   |                                 |   |   |                                 |   |
|                                                                  |   |           |   |   |         |   |   |                                 |   |   |                                 |   |
| **Balance,                    March 31, 2007**                        |   | $              | 412.2  |   |         | $      | 145.4  |                                 |   | $      | 13.0                                 |   |   | $ | --- |   |
| Net                    earnings                                       |   |           | ---    |   |         |   | 18.7   |                                 |   |   | ---                                  |   |   |   | 18.7 |   |
| Other                    comprehensive income (loss):                 |   |           |   |   |         |   |   |                                 |   |   |                                 |   |   |   |   |   |
|                       Currency translation adjustment       |   |           | ---    |   |         |   | ---    |                                 |   |   | 7.2                                  |   |   |   | 7.2 |   |
|                       Pension liability adjustment          |   |           | ---    |   |         |   | ---    |                                 |   |   | (0.1                                 | )      |   |   | (0.1 | ) |
| Comprehensive                    income                               |   |           |   |   |         |   |   |                                 |   |   |                                 |   |   | $ | 25.8 |   |
| Adoption                    of                    FIN 48 (see Note F) |   |           | ---    |   |         |   | ---    |                                 |   |   | ---                                  |   |   |   |   |   |
| Stock-based                    compensation                           |   |           | 0.1    |   |         |   | ---    |                                 |   |   | ---                                  |   |   |   |   |   |
| **Balance,                    June 30, 2007**                         |   | $              | 412.3  |   |         | $      | 164.1  |                                 |   | $      | 20.1                                 |   |   |   |   |   |

*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 FIRST SIX MONTHS ENDED JUNE 30, 2007**

*(Dollar        amounts in millions)*

|                                                                  |   |           |   |   |         |   |   | **Accumulated**                      |   |   |                                 |   |
|-----------------------------------------------------------------------|--------|----------------|--------|--------|--------------|--------|--------|--------------------------------------|--------|--------|--------------------------------------|--------|
|                                                                  |   | **Additional** |   |   |         |   |   | **Other**                            |   |   |                                 |   |
|                                                                  |   | **Paid-in**    |   |   | **Retained** |   |   | **Comprehensive**                    |   |   | **Comprehensive**                    |   |
|                                                                  |   | **Capital**    |   |   | **Earnings** |   |   | **Income                    (Loss)** |   |   | **Income                    (Loss)** |   |
|                                                                  |   |           |   |   |         |   |   |                                 |   |   |                                 |   |
|                                                                  |   |           |   |   |         |   |   |                                 |   |   |                                 |   |
| **Balance,                    December 31, 2006**                     |   | $              | 412.1  |   |         | $      | 139.4  |                                 |   | $      | 11.6                                 |   |   | $ | --- |   |
| Net                    earnings                                       |   |           | ---    |   |         |   | 27.9   |                                 |   |   | ---                                  |   |   |   | 27.9 |   |
| Other                    comprehensive income (loss):                 |   |           |   |   |         |   |   |                                 |   |   |                                 |   |   |
|                       Currency translation adjustment       |   |           | ---    |   |         |   | ---    |                                 |   |   | 8.6                                  |   |   |   | 8.6 |   |
|                       Pension liability adjustment          |   |           | ---    |   |         |   | ---    |                                 |   |   | (0.1                                 | )      |   |   | (0.1 | ) |
| Comprehensive                    income                               |   |           |   |   |         |   |   |                                 |   |   |                                 |   |   | $ | 36.4 |   |
| Adoption                    of                    FIN 48 (see Note F) |   |           | ---    |   |         |   | (3.2   | )                                    |   |   | ---                                  |   |   |   |   |   |
| Stock-based                    compensation                           |   |           | 0.2    |   |         |   | ---    |                                 |   |   | ---                                  |   |   |   |   |   |
| **Balance,                    June 30, 2007**                         |   | $              | 412.3  |   |         | $      | 164.1  |                                 |   | $      | 20.1                                 |   |   |   |   |   |

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

| (A)   | The                  unaudited condensed consolidated financial statements presented                  herein                  (the “Unaudited Financial Statements”) reflect the financial position,                  results of operations and cash flows of Nortek, Inc. (the “Company” or                  “Nortek”) and all of its wholly-owned subsidiaries.  The                  Unaudited Financial Statements include the accounts of Nortek,                  as                  appropriate, and all of its wholly-owned subsidiaries, after elimination                  of intercompany accounts and transactions, without audit and, in                  the                  opinion of management, reflect all adjustments of a normal recurring                  nature necessary for a fair statement of the interim periods                  presented.  Although certain information and footnote                  disclosures normally included in financial statements prepared                  in                  accordance with U.S. generally accepted accounting principles have                  been                  omitted, the Company believes that the disclosures included are                  adequate                  to make the information presented not misleading.  Certain                  amounts in the prior year’s Unaudited Financial Statements have been                  reclassified to conform to the current year presentation.  It is                  suggested that these Unaudited Financial Statements be read in                  conjunction                  with the consolidated financial statements and the notes included                  in the                  Company’s latest annual report on Form 10-K and its latest Current Reports                  on Form 8-K as filed with the Securities and Exchange Commission                  (“SEC”). |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

**Income        Taxes**

**Goodwill**

|                                                                          |  *(Amounts                  in millions)*  |
|-------------------------------------------------------------------------------|------------------------------------------------------|
|                                                                          |                                                 |   |   |
| **Balance                  at December 31, 2006**                             |                                                 | **$** | **1,481.4** |   |
| Acquisitions                  during the first six months ended June 30, 2007 |                                                 |   | 22.9 |   |
| Adoption                  of FIN 48 (see Note F)                              |                                                 |   | 3.8 |   |
| Realization                  of FIN 48 reserves                               |                                                 |   | (0.2 | ) |
| Purchase                  accounting adjustments                              |                                                 |   | 0.1 |   |
| Impact                  of foreign currency translation                       |                                                 |   | 1.3 |   |
| **Balance                  at June 30, 2007**                                 |                                                 | **$** | **1,509.3** |   |

**Long-term        payable to affiliate**

**New        Accounting Pronouncements**

| (B) | At                  June 30, 2007, the Company had approximately $84.0 million outstanding                  and                  approximately $84.3 million of additional borrowing capacity under                  the                  U.S. revolving portion of its senior secured credit facility, with                  approximately $21.7 million in outstanding letters of                  credit.  Borrowings under the revolving portion of the senior                  secured credit facility are used for general working capital                  purposes.  Under the Canadian revolving portion of its senior                  secured credit facility the Company had no outstanding borrowings                  and                  approximately $10.0 million of additional borrowing                  capacity.  Letters of credit have been issued under the                  Company’s revolving credit facility as additional security for (1)                  approximately $17.2 million relating to certain of the Company’s insurance                  programs, (2) approximately $3.6 million relating to leases outstanding                  for certain of the Company’s manufacturing facilities and (3)                  approximately $0.9 million relating to certain of the subsidiaries’                  purchases and other requirements.  Letters of credit reduce                  borrowing availability under the Company’s revolving credit facility on a                  dollar for dollar basis.  Subsequent to June 30, 2007, the                  Company repaid approximately $5.0 million of outstanding borrowings                  under                  the U.S. revolving portion of its senior secured credit                  facility. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | On                  June 25, 2007, the Company, through its wholly-owned subsidiary,                  Linear                  LLC (“Linear”), acquired International Electronics, Inc. (“IEI”) through a                  cash tender offer to purchase all of the outstanding shares of                  common                  stock of IEI at a price of $6.65 per share.  The total purchase                  price was approximately $13.8 million, of which approximately $2.3                  million                  will be paid in the third quarter of 2007.  IEI is located in                  Canton, MA and designs and sells security and access control components                  and systems for use in residential and light commercial                  applications. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (D) | During                  the second quarter ended June 30, 2007 and July 1, 2006, the Company’s                  results of operations include the following (income) and expense                  items                  recorded in cost of products sold and selling, general and administrative                  expense, net in the accompanying unaudited condensed consolidated                  statement of operations: |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                           |   | **For                  the second quarter ended *** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|
|                                                                                                                                                                                                                                           |   | **June                  30, 2007**                  |   |   | **July                  1, 2006** |
|                                                                                                                                                                                                                                           |   | *(Amounts                  in millions)*            |
|                                                                                                                                                                                                                                           |   |                                                |   |   |   |
| Gain                  from curtailment of post-retirement medical and life insurance                  benefits                  (see Note I)                                                                                                   |   | $                                                   | --- |   |   | $ | (35.9 | ) |
| Charges                  related to the closure of the Company’s NuTone, Inc. Cincinnati, OH                  facility (1)                                                                                                               |   |                                                | 0.8 |   |   |   | 3.5 |   |
| Charges                  related to the closure of the Company’s Mammoth, Inc. Chaska, MN                  facility                                                                                                                      |   |                                                | 0.3 |   |   |   | --- |   |
| Legal                  and other professional fees and expenses incurred in connection                  with                                      matters related to certain subsidiaries based in Italy and                  Poland |   |                                                | 0.3 |   |   |   | --- |   |
| Reserve                  for amounts due from a customer in the HTP segment                                                                                                                                                                    |   |                                                | 0.5 |   |   |   | --- |   |
| Product                  safety upgrade reserves in the RVP and HTP segments (2)                                                                                                                                                               |   |                                                | (0.2 | ) |   |   | 4.0 |   |
| Gain                  on settlement of litigation in the HVAC segment                                                                                                                                                                          |   |                                                | --- |   |   |   | (0.4 | ) |
| Non-cash                  foreign exchange loss (gain) related to intercompany    debt                  not indefinitely invested in the Company’s subsidiaries                                                           |   |                                                | 0.3 |   |   |   | (0.2 | ) |
|                                                                                                                                                                                                                                           |   | $                                                   | 2.0 |   |   | $ | (29.0 | ) |

|   |                     * | Unless                  otherwise indicated, all items noted in the table have been recorded                  in                  selling, general and administrative expense, net in the accompanying                  unaudited condensed consolidated statement of                  operations. |
|--------|---------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (1)   | For                  the second quarter ended June 30, 2007, all charges related to                  the closure                  of NuTone were recorded in selling, general and administrative                  expense,                  net.  For the second quarter ended July 1, 2006, approximately                  $1.4 million of the charges related to the closure of NuTone was                  recorded                  in cost of products sold and approximately $2.1 million was charged                  to                  selling, general and administrative expense,                  net. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | The                  RVP and HTP segments recorded these product safety upgrade reserves                  in                  cost of products sold (see Note G). |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                           |   | **For                  the first six months ended *** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                                                                                                                                                                                                           |   | **June                  30, 2007**                    |   |   | **July                  1, 2006** |   |
|                                                                                                                                                                                                                                           |   | *(Amounts                  in millions)*              |   |
|                                                                                                                                                                                                                                           |   |                                                  |   |   |   |   |
| Gain                  from curtailment of post-retirement medical and life insurance                  benefits                  (see Note I)                                                                                                   |   | $                                                     | ---    |   |   | $ | (35.9 | ) |
| Charges                  related to the closure of the Company’s NuTone, Inc. Cincinnati, OH                  facility (1)                                                                                                               |   |                                                  | 1.4    |   |   |   | 3.5 |   |
| Charges                  related to the closure of the Company’s Mammoth, Inc. Chaska, MN                  facility                                                                                                                      |   |                                                  | 0.3    |   |   |   | --- |   |
| Legal                  and other professional fees and expenses incurred in connection                  with                                      matters related to certain subsidiaries based in Italy and                  Poland |   |                                                  | 1.3    |   |   |   | --- |   |
| Product                  safety upgrade reserves in the RVP and HTP segments (2)                                                                                                                                                               |   |                                                  | (0.2   | ) |   |   | 5.5 |   |
| Reserve                  for amounts due from customers in the HTP and HVAC                  segments                                                                                                                                          |   |                                                  | 2.3    |   |   |   | --- |   |
| Gain                  on settlement of litigation in the HVAC segment                                                                                                                                                                          |   |                                                  | ---    |   |   |   | (0.4 | ) |
| Non-cash                  foreign exchange loss (gain) related to intercompany                      debt not indefinitely invested in the Company’s                  subsidiaries                                         |   |                                                  | 0.1    |   |   |   | (0.3 | ) |
|                                                                                                                                                                                                                                           |   | $                                                     | 5.2    |   |   | $ | (27.6 | ) |

|   |                     * | Unless                  otherwise indicated, all items noted in the table have been recorded                  in                  selling, general and administrative expense, net in the accompanying                  unaudited condensed consolidated statement of                  operations. |
|--------|---------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (1)   | For                  the first six months ended June 30, 2007, all charges related to                  the                  closure of NuTone were recorded in selling, general and administrative                  expense, net.  For the first six months ended July 1, 2006,                  approximately $1.4 million of the charges related to the closure                  of NuTone                  was recorded in cost of products sold and approximately $2.1 million                  was                  charged to selling, general and administrative expense,                  net. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | The                  RVP and HTP segments recorded these product safety upgrade reserves                  in                  cost of products sold (see Note G). |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (E) | The                  Company is                  a leading diversified manufacturer of innovative, branded residential                  and                  commercial products, which is organized within three reporting                  segments:                  the Residential Ventilation Products (“RVP”) segment, the Home Technology                  Products (“HTP”) segment and the Air Conditioning and Heating Products                  (“HVAC”) segment.  The HVAC segment combines the results of the                  Company’s residential and commercial heating, ventilating and air                  conditioning businesses.  In the tables below, Unallocated                  includes corporate related items, intersegment eliminations and                  certain                  income and expense items not allocated to reportable                  segments. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                       |  **For                    the second quarter ended**  |
|----------------------------------------------------------------------------|-----------------------------------------------------------------|
|                                                                       |                                                            | **June                    30, 2007** |   |   | **July                    1, 2006** |   |
|                                                                       |                                                            | *(Dollar                    amounts in millions)* |   |
| **Net                    sales:**                                          |                                                            |   |   |   |   |   |
| Residential                    ventilation products                        |                                                            | $ | 206.1 |   |   | $ | 207.3 |   |
| Home                    technology products                                |                                                            |   | 143.9 |   |   |   | 115.1 |   |
| Air                    conditioning and heating products                   |                                                            |   | 294.3 |   |   |   | 241.4 |   |
|                       Consolidated net sales                     |                                                            | $ | 644.3 |   |   | $ | 563.8 |   |
|                                                                       |                                                            |   |   |   |   |   |   |   |
| **Operating                    earnings:**                                 |                                                            |   |   |   |   |   |   |   |
| Residential                    ventilation products (1)                    |                                                            | $ | 26.0 |   |   | $ | 69.8 |   |
| Home                    technology products (2)                            |                                                            |   | 23.3 |   |   |   | 14.4 |   |
| Air                    conditioning and heating products (3)               |                                                            |   | 22.7 |   |   |   | 19.3 |   |
|                       Subtotal                                   |                                                            |   | 72.0 |   |   |   | 103.5 |   |
| **Unallocated:**                                                           |                                                            |   |   |   |   |   |   |   |
| Stock-based                    compensation charges                        |                                                            |   | (0.1 | ) |   |   | (0.1 | ) |
| Foreign                    exchange gain on intercompany debt              |                                                            |   | 0.2 |   |   |   | 0.2 |   |
| Unallocated,                    net                                        |                                                            |   | (7.4 | ) |   |   | (6.6 | ) |
|                       Consolidated operating earnings            |                                                            |   | 64.7 |   |   |   | 97.0 |   |
| Interest                    expense                                        |                                                            |   | (30.8 | ) |   |   | (28.0 | ) |
| Investment                    income                                       |                                                            |   | 0.5 |   |   |   | 0.5 |   |
|                       Earnings before provision for income taxes |                                                            | $ | 34.4 |   |   | $ | 69.5 |   |

|   | (1) | The                  operating results of the RVP segment for the second quarter ended                  June 30,                  2007 include an approximate $0.8 million charge related to the                  closure of                  the Company’s NuTone, Inc. Cincinnati, Ohio facility (see Note H), legal                  and other professional fees and expenses incurred in connection                  with                  matters related to certain subsidiaries based in Italy and Poland                  of                  approximately $0.3 million (see Note G) and a non-cash foreign                  exchange                  loss of approximately $0.5 million related to intercompany debt                  not                  indefinitely invested in the Company’s subsidiaries.  The                  operating results of the RVP segment for the second quarter ended                  July 1,                  2006 include an approximate $35.9 million curtailment gain related                  to                  post-retirement medical benefits and an approximate $3.5 million                  charge                  related to the planned closure of the Company’s NuTone, Inc. Cincinnati,                  Ohio facility (see Note H). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The                  operating results of the HTP segment for the second quarter ended                  June 30,                  2007 include a charge of approximately $0.5 million related to                  a reserve                  for amounts due from a customer and a decrease in warranty expense                  of                  approximately $0.2 million related to a product safety                  upgrade.  The operating results of the HTP segment for the                  second quarter ended July 1, 2006 include an increase in warranty                  expense                  of approximately $4.0 million related to a product safety                  upgrade. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | The                  operating results of the HVAC segment for the second quarter ended                  June                  30, 2007 include a charge of approximately $0.3 million related                  to the                  planned closure of the Company’s Mammoth, Inc. Chaska, Minnesota                  manufacturing facility (see Note                  H). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                       |   | **For                    the first six months ended** |    |
|----------------------------------------------------------------------------|--------|-------------------------------------------------------|---------|
|                                                                       |   | **June                    30, 2007**                  |    |   | **July                    1, 2006** |   |
|                                                                       |   | *(Dollar                    amounts in millions)*     |    |
| **Net                    sales:**                                          |   |                                                  |    |   |   |   |
| Residential                    ventilation products                        |   | $                                                     | 414.8   |   |   | $ | 418.9 |   |
| Home                    technology products                                |   |                                                  | 267.1   |   |   |   | 222.6 |   |
| Air                    conditioning and heating products                   |   |                                                  | 514.9   |   |   |   | 456.8 |   |
|                       Consolidated net sales                     |   | $                                                     | 1,196.8 |   |   | $ | 1,098.3 |   |
|                                                                       |   |                                                  |    |   |   |   |   |   |
| **Operating                    earnings:**                                 |   |                                                  |    |   |   |   |   |   |
| Residential                    ventilation products (1)                    |   | $                                                     | 51.2    |   |   | $ | 105.9 |   |
| Home                    technology products (2)                            |   |                                                  | 39.8    |   |   |   | 31.7 |   |
| Air                    conditioning and heating products (3)               |   |                                                  | 32.5    |   |   |   | 37.2 |   |
|                       Subtotal                                   |   |                                                  | 123.5   |   |   |   | 174.8 |   |
| **Unallocated:**                                                           |   |                                                  |    |   |   |   |   |   |
| Stock-based                    compensation charges                        |   |                                                  | (0.2    | ) |   |   | (0.2 | ) |
| Foreign                    exchange gain on intercompany debt              |   |                                                  | 0.3     |   |   |   | 0.3 |   |
| Unallocated,                    net                                        |   |                                                  | (14.0   | ) |   |   | (13.2 | ) |
|                       Consolidated operating earnings            |   |                                                  | 109.6   |   |   |   | 161.7 |   |
| Interest                    expense                                        |   |                                                  | (60.0   | ) |   |   | (56.0 | ) |
| Investment                    income                                       |   |                                                  | 0.9     |   |   |   | 1.2 |   |
|                       Earnings before provision for income taxes |   | $                                                     | 50.5    |   |   | $ | 106.9 |   |

|   | (1) | The                  operating results of the RVP segment for the first six months ended                  June                  30, 2007 include an approximate $1.4 million charge related to                  the closure                  of the Company’s NuTone, Inc. Cincinnati, Ohio facility (see Note H),                  legal and other professional fees and expenses incurred in connection                  with                  matters related to certain subsidiaries based in Italy and Poland                  of                  approximately $1.3 million (see Note G) and a non-cash foreign                  exchange                  loss of approximately $0.4 million related to intercompany debt                  not                  indefinitely invested in the Company’s subsidiaries.  The                  operating results of the RVP segment for the first six months ended                  July                  1, 2006 include an approximate $35.9 million curtailment gain related                  to                  post-retirement medical benefits, an approximate $3.5 million charge                  related to the planned closure of the Company’s NuTone, Inc. Cincinnati,                  Ohio facility (see Note H) and an increase in warranty expense                  of                  approximately $1.5 million related to a product safety                  upgrade. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The                  operating results of the HTP segment for the first six months ended                  June                  30, 2007 include a charge of approximately $0.5 million related                  to a                  reserve for amounts due from a customer and a decrease in warranty                  expense                  of approximately $0.2 million related to a product safety                  upgrade.  The operating results of the HTP segment for the first                  six months ended July 1, 2006 include an increase in warranty expense                  of                  approximately $4.0 million related to a product safety                  upgrade. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | The                  operating results of the HVAC segment for the first six months                  ended June                  30, 2007 include a charge of approximately $0.3 million related                  to the                  planned closure of the Company’s Mammoth, Inc. Chaska, Minnesota                  manufacturing facility (see Note H) and a charge of approximately                  $1.8                  million related to a reserve for amounts due from a                  customer. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                              |   | **For                    the second quarter ended** |   |
|-------------------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                              |   | **June                    30, 2007**                |   |   | **July                    1, 2006** |   |
|                                                              |   | *(Dollar                    amounts in millions)*   |   |
| **Depreciation                    Expense:**                      |   |                                                |   |   |   |   |
| Residential                    ventilation products               |   | $                                                   | 4.1    |   |   | $ | 3.3 |   |
| Home                    technology products                       |   |                                                | 1.4    |   |   |   | 0.9 |   |
| Air                    conditioning and heating products          |   |                                                | 4.5    |   |   |   | 3.8 |   |
| Other                                                             |   |                                                | 0.1    |   |   |   | 0.2 |   |
|                       Consolidated depreciation expense |   | $                                                   | 10.1   |   |   | $ | 8.2 |   |
|                                                              |   |                                                |   |   |   |   |   |   |
| **Amortization                    expense:**                      |   |                                                |   |   |   |   |   |   |
| Residential                    ventilation products               |   | $                                                   | 1.3    |   |   | $ | 1.5 |   |
| Home                    technology products                       |   |                                                | 3.2    |   |   |   | 2.3 |   |
| Air                    conditioning and heating products (1)      |   |                                                | 1.8    |   |   |   | 3.9 |   |
| Other                                                             |   |                                                | 0.1    |   |   |   | 0.2 |   |
|                       Consolidated amortization expense |   | $                                                   | 6.4    |   |   | $ | 7.9 |   |
|                                                              |   |                                                |   |   |   |   |   |   |
| **Capital                    Expenditures:**                      |   |                                                |   |   |   |   |   |   |
| Residential                    ventilation products               |   | $                                                   | 3.3    |   |   | $ | 4.8 |   |
| Home                    technology products                       |   |                                                | 1.4    |   |   |   | 1.5 |   |
| Air                    conditioning and heating products          |   |                                                | 2.6    |   |   |   | 4.3 |   |
| Other                                                             |   |                                                | ---    |   |   |   | --- |   |
|                       Consolidated capital expenditures |   | $                                                   | 7.3    |   |   | $ | 10.6 |   |

| (1)                      | Includes                  amortization of approximately $2.1 million for the second quarter                  ended                  July 1, 2006 of excess purchase price allocated to inventory recorded                  as a                  non-cash charge to cost of products                  sold. |
|-----------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                              |   | **For                    the first six months ended** |   |
|-------------------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                              |   | **June                    30, 2007**                  |   |   | **July                    1, 2006** |   |
|                                                              |   | *(Dollar                    amounts in millions)*     |   |
| **Depreciation                    Expense:**                      |   |                                                  |   |   |   |   |
| Residential                    ventilation products               |   | $                                                     | 7.1    |   |   | $ | 6.5 |   |
| Home                    technology products                       |   |                                                  | 2.7    |   |   |   | 1.8 |   |
| Air                    conditioning and heating products          |   |                                                  | 8.6    |   |   |   | 7.5 |   |
| Other                                                             |   |                                                  | 0.3    |   |   |   | 0.3 |   |
|                       Consolidated depreciation expense |   | $                                                     | 18.7   |   |   | $ | 16.1 |   |
|                                                              |   |                                                  |   |   |   |   |   |   |
| **Amortization                    expense:**                      |   |                                                  |   |   |   |   |   |   |
| Residential                    ventilation products               |   | $                                                     | 2.6    |   |   | $ | 3.0 |   |
| Home                    technology products (1)                   |   |                                                  | 5.9    |   |   |   | 4.4 |   |
| Air                    conditioning and heating products (2)      |   |                                                  | 3.7    |   |   |   | 4.5 |   |
| Other                                                             |   |                                                  | 0.2    |   |   |   | 0.3 |   |
|                       Consolidated amortization expense |   | $                                                     | 12.4   |   |   | $ | 12.2 |   |
|                                                              |   |                                                  |   |   |   |   |   |   |
| **Capital                    Expenditures:**                      |   |                                                  |   |   |   |   |   |   |
| Residential                    ventilation products               |   | $                                                     | 5.7    |   |   | $ | 9.4 |   |
| Home                    technology products                       |   |                                                  | 2.6    |   |   |   | 3.4 |   |
| Air                    conditioning and heating products          |   |                                                  | 5.8    |   |   |   | 9.8 |   |
| Other                                                             |   |                                                  | ---    |   |   |   | 0.1 |   |
|                       Consolidated capital expenditures |   | $                                                     | 14.1   |   |   | $ | 22.7 |   |

| (1)   | Includes                  amortization of approximately $0.1 million for the first six months                  ended                  July 1, 2006 of excess purchase price allocated to inventory recorded                  as a                  non-cash charge to cost of products                  sold. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Includes                  amortization of approximately $2.1 million for the first six months                  ended                  July 1, 2006 of excess purchase price allocated to inventory recorded                  as a                  non-cash charge to cost of products                  sold. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (F) | 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 44.8% and 38.0% for the first six months ended June                  30, 2007                  and July 1, 2006: |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                            |   | **For                  the first six months ended**  |
|-----------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|
|                                                                                                            |   | **June                  30, 2007**                   |   | **July                  1, 2006**  |
| Income                  tax provision at the federal statutory rate                                             |   |                                                      | 35.0 | % |   |   | 35.0 | % |
| Net                  change from federal statutory rate:                                                        |   |                                                      |   |   |   |   |   |   |
| Interest                  related to uncertain tax positions, net of federal income tax                  effect |   |                                                      | 2.2 |   |   |   | --- |   |
| State                  income tax provision, net of federal income                  tax effect                  |   |                                                      | 2.9 |   |   |   | 1.6 |   |
| Tax                  effect resulting from foreign activities                                                   |   |                                                      | 3.5 |   |   |   | 0.7 |   |
| Non-deductible                  expenses                                                                        |   |                                                      | 0.7 |   |   |   | 0.5 |   |
| Other,                  net                                                                                     |   |                                                      | 0.5 |   |   |   | 0.2 |   |
| Income                  tax provision at estimated effective rate                                               |   |                                                      | 44.8 | % |   |   | 38.0 | % |

| (G) | At                  June 30, 2007, the Company’s former subsidiary, Ply Gem, has guaranteed                  approximately $20.5 million 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 and has recorded an estimated liability related                  to this                  indemnified guarantee of approximately $0.9 million at June 30,                  2007 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 second quarter ended** |   |
|---------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|--------|
|                                                                                                    |   | **June                  30, 2007**                |   |   | **July                  1, 2006** |   |
|                                                                                                    |   | *(Amounts                  in millions)*          |   |
|                                                                                                    |   |                                              |   |   |   |   |
| Balance,                  beginning of period                                                           |   | $                                                 | 41.5   |   |   | $ | 38.2 |   |
| Warranties                  provided during period                                                      |   |                                              | 7.8    |   |   |   | 10.2 |   |
| Settlements                  made during period                                                         |   |                                              | (7.0   | ) |   |   | (5.8 | ) |
| Changes                  in liability estimate, including expirations and                  acquisitions |   |                                              | 1.1    |   |   |   | 0.8 |   |
| Balance,                  end of period                                                                 |   | $                                                 | 43.4   |   |   | $ | 43.4 |   |

|                                                                                                    |   | **For                  the first six months ended** |   |
|---------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                                                                    |   | **June                  30, 2007**                  |   |   | **July                  1, 2006** |   |
|                                                                                                    |   | *(Amounts                  in millions)*            |   |
|                                                                                                    |   |                                                |   |   |   |   |
| Balance,                  beginning of period                                                           |   | $                                                   | 41.2   |   |   | $ | 34.8 |   |
| Warranties                  provided during period                                                      |   |                                                | 13.3   |   |   |   | 17.5 |   |
| Settlements                  made during period                                                         |   |                                                | (12.6  | ) |   |   | (10.0 | ) |
| Changes                  in liability estimate, including expirations and                  acquisitions |   |                                                | 1.5    |   |   |   | 1.1 |   |
| Balance,                  end of period                                                                 |   | $                                                   | 43.4   |   |   | $ | 43.4 |   |

| (H) | 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** |   |
|---------------------------------------------------|--------|---------------------------------------------------|---------|--------|-----------|------------|---------|-------------------------------------|--------|
|                                              |   | *(Dollar                  amounts in millions)*   |    |
|                                              |   |                                              |    |   |      |       |    |                                |   |
| **Balance                  at December 31, 2006** |   | **$**                                             | **---** |   |      | **$**      | **0.1** |                                |   | **$** | **0.1** |   |
| Provision                                         |   |                                              | 0.6     |   |      |       | 0.1     |                                |   |   | 0.7 |   |
| Payments                  and asset write downs   |   |                                              | ---     |   |      |       | (0.1    | )                                   |   |   | (0.1 | ) |
| **Balance                  at March 31, 2007**    |   | ** **                                        | **0.6** |   |      | ** ** | **0.1** |                                |   | ** ** | **0.7** |   |
| Provision                                         |   |                                              | 1.1     |   |      |       | ---     |                                |   |   | 1.1 |   |
| Payments                                     |   |                                              | (0.3    | )      |      |       | ---     |                                |   |   | (0.3 | )  |
| **Balance                  at June 30, 2007**     |   | **$**                                             | **1.4** |   |      | **$**      | **0.1** |                                |   | **$** | **1.5** |   |

| (I) | The                  Company and its subsidiaries have various pension plans, supplemental                  retirement plans for certain officers, profit sharing and other                  post-retirement benefit plans requiring contributions to qualified                  trusts                  and union administered funds. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            |   | **For                  the second quarter ended** |   |
|-------------------------------------------------|--------|---------------------------------------------------|--------|
|                                            |   | **June                  30, 2007**                |   |   | **July                  1, 2006** |   |
|                                            |   | *(Dollar                  amounts in millions)*   |   |
|                                            |   |                                              |   |   |   |   |
| Service                  cost                   |   | $                                                 | 0.2    |   |   | $ | 0.3 |   |
| Interest                  cost                  |   |                                              | 2.4    |   |   |   | 2.2 |   |
| Expected                  return on plan assets |   |                                              | (2.5   | ) |   |   | (2.2 | ) |
| Net                  periodic benefit cost      |   | $                                                 | 0.1    |   |   | $ | 0.3 |   |

|                                            |   | **For                  the first six months ended** |   |
|-------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                            |   | **June                  30, 2007**                  |   |   | **July                  1, 2006** |   |
|                                            |   | *(Dollar                  amounts in millions)*     |   |
|                                            |   |                                                |   |   |   |   |
| Service                  cost                   |   | $                                                   | 0.3    |   |   | $ | 0.6 |   |
| Interest                  cost                  |   |                                                | 4.8    |   |   |   | 4.5 |   |
| Expected                  return on plan assets |   |                                                | (5.0   | ) |   |   | (4.5 | ) |
| Net                  periodic benefit cost      |   | $                                                   | 0.1    |   |   | $ | 0.6 |   |

|                                                        |   | **For                  the second quarter ended** |   |
|-------------------------------------------------------------|--------|---------------------------------------------------|--------|
|                                                        |   | **June                  30, 2007**                |   |   | **July                  1, 2006** |   |
|                                                        |   | *(Dollar                  amounts in millions)*   |   |
|                                                        |   |                                              |   |   |   |   |
| Interest                  cost                              |   | $                                                 | ---    |   |   | $ | 0.2 |   |
| Amortization                  of prior service cost         |   |                                              | ---    |   |   |   | (0.4 | ) |
| Curtailment                  gain                           |   |                                              | ---    |   |   |   | (35.9 | ) |
| Net                  periodic post-retirement health income |   | $                                                 | ---    |   |   | $ | (36.1 | ) |

|                                                        |   | **For                  the first six months ended** |   |
|-------------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                        |   | **June                  30, 2007**                  |   |   | **July                  1, 2006** |   |
|                                                        |   | *(Dollar                  amounts in millions)*     |   |
|                                                        |   |                                                |   |   |   |   |
| Service                  cost                               |   | $                                                   | ---    |   |   | $ | 0.1 |   |
| Interest                  cost                              |   |                                                | 0.1    |   |   |   | 0.5 |   |
| Amortization                  of prior service cost         |   |                                                | (0.1   | ) |   |   | (1.4 | ) |
| Curtailment                  gain                           |   |                                                | ---    |   |   |   | (35.9 | ) |
| Net                  periodic post-retirement health income |   | $                                                   | ---    |   |   | $ | (36.7 | ) |

| (J)   | The                  Company’s 8 1/2% Notes are guaranteed by all of the Company’s current and                  certain future domestic subsidiaries (the “Guarantors”), as defined, with                  the exception of certain domestic subsidiaries, as defined, which                  are                  excluded from the 8 1/2% Note guarantee. 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 June 30, 2007**

|                                                                                            |   |                                                                                                                            |    |   | **Guarantor**    |   |    | **Non-Guarantor** |   |   |             |   |   | **Nortek**       |     |
|-------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------|---------|--------|------------------|--------|---------|-------------------|--------|--------|------------------|--------|--------|------------------|----------|
|                                                                                            |   | **Parent**                                                                                                                      |    |   | **Subsidiaries** |   |    | **Subsidiaries**  |   |   | **Eliminations** |   |   | **Consolidated** |     |
|                                                                                            |   |  *(Dollar                    amounts in millions)*             |    |
| **ASSETS:**                                                                                     |   |                                                                                                                            |    |   |             |   |    |              |   |   |             |   |   |             |     |
| **Current                    Assets:**                                                          |   |                                                                                                                            |    |   |             |   |    |              |   |   |             |   |   |             |     |
| Unrestricted                    cash and cash equivalents                                       |   | $                                                                                                                               | 28.2    |   |             | $      | 9.8     |              |   | $      | 37.3             |   |   | $                | ---      |   |   | $ | 75.3 |   |
| Restricted                    cash                                                              |   |                                                                                                                            | ---     |   |             |   | 1.3     |              |   |   | ---              |   |   |             | ---      |   |   |   | 1.3 |   |
| Accounts                    receivable, less allowances                                         |   |                                                                                                                            | ---     |   |             |   | 287.3   |              |   |   | 97.1             |   |   |             | ---      |   |   |   | 384.4 |   |
| Intercompany                    receivables (payables)                                          |   |                                                                                                                            | 3.3     |   |             |   | (9.2    | )                 |   |   | 5.9              |   |   |             | ---      |   |   |   | --- |   |
| Inventories                                                                                     |   |                                                                                                                            | ---     |   |             |   | 252.0   |              |   |   | 68.2             |   |   |             | ---      |   |   |   | 320.2 |   |
| Prepaid                    expenses                                                             |   |                                                                                                                            | 0.8     |   |             |   | 8.1     |              |   |   | 4.6              |   |   |             | ---      |   |   |   | 13.5 |   |
| Other                    current                    assets                                      |   |                                                                                                                            | 0.1     |   |             |   | 2.1     |              |   |   | 9.2              |   |   |             | ---      |   |   |   | 11.4 |   |
| Prepaid                    income                    taxes                                      |   |                                                                                                                            | 7.7     |   |             |   | 21.5    |              |   |   | 1.0              |   |   |             | ---      |   |   |   | 30.2 |   |
|      Total                    current assets                           |   |                                                                                                                            | 40.1    |   |             |   | 572.9   |              |   |   | 223.3            |   |   |             | ---      |   |   |   | 836.3 |   |
| **Property                    and Equipment, at Cost:**                                         |   |                                                                                                                            |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |
| Total                    property                    and equipment, net                         |   |                                                                                                                            | 1.2     |   |             |   | 141.9   |              |   |   | 79.3             |   |   |             | ---      |   |   |   | 222.4 |   |
| **Other                    Long-term Assets:**                                                  |   |                                                                                                                            |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |   |   |   |
| Investment                    in                    subsidiaries and long-term                  |   |                                                                                                                            |    |   |             |   |    |              |   |   |             |   |   |
|    receivable                    from (to) subsidiaries                          |   |                                                                                                                            | 2,046.3 |   |             |   | (160.1  | )                 |   |   | (80.0            | )      |   |             | (1,806.2 | ) |   |   | --- |   |
| Goodwill                                                                                        |   |                                                                                                                            | ---     |   |             |   | 1,482.5 |              |   |   | 26.8             |   |   |             | ---      |   |   |   | 1,509.3 |   |
| Intangible                    assets, less accumulated amortization                             |   |                                                                                                                            | 0.6     |   |             |   | 119.3   |              |   |   | 22.1             |   |   |             | ---      |   |   |   | 142.0 |   |
| Other                    assets                                                                 |   |                                                                                                                            | 37.4    |   |             |   | 7.0     |              |   |   | 0.5              |   |   |             | ---      |   |   |   | 44.9 |   |
|      Total                    other long-term assets                   |   |                                                                                                                            | 2,084.3 |   |             |   | 1,448.7 |              |   |   | (30.6            | )      |   |             | (1,806.2 | ) |   |   | 1,696.2 |   |
|      Total                    assets                                   |   | $                                                                                                                               | 2,125.6 |   |             | $      | 2,163.5 |              |   | $      | 272.0            |   |   | $                | (1,806.2 | ) |   | $ | 2,754.9 |   |
| **LIABILITIES                    AND STOCKHOLDER'S**                                            |   |                                                                                                                            |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |
| **     INVESTMENT:**                                                   |   |                                                                                                                            |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |   |   |   |
| **Current                    Liabilities:**                                                     |   |                                                                                                                            |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |   |   |   |
| Notes                    payable                    and other short-term obligations            |   | $                                                                                                                               | 84.0    |   |             | $      | 0.7     |              |   | $      | 14.7             |   |   | $                | ---      |   |   | $ | 99.4 |   |
| Current                    maturities of long-term debt                                         |   |                                                                                                                            | 7.0     |   |             |   | 17.1    |              |   |   | 2.8              |   |   |             | ---      |   |   |   | 26.9 |   |
| Accounts                    payable                                                             |   |                                                                                                                            | 1.0     |   |             |   | 152.4   |              |   |   | 90.4             |   |   |             | ---      |   |   |   | 243.8 |   |
| Accrued                    expenses and taxes, net                                              |   |                                                                                                                            | 24.6    |   |             |   | 155.8   |              |   |   | 54.6             |   |   |             | ---      |   |   |   | 235.0 |   |
|      Total                    current liabilities                      |   |                                                                                                                            | 116.6   |   |             |   | 326.0   |              |   |   | 162.5            |   |   |             | ---      |   |   |   | 605.1 |   |
| **Other                    Liabilities:**                                                       |   |                                                                                                                            |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |   |   |   |
| Deferred                    income taxes                                                        |   |                                                                                                                            | (11.5   | )      |             |   | 23.9    |              |   |   | 16.8             |   |   |             | ---      |   |   |   | 29.2 |   |
| Long-term                    payable to affiliate                                               |   |                                                                                                                            | 30.0    |   |             |   | ---     |              |   |   | ---              |   |   |             | ---      |   |   |   | 30.0 |   |
| Other                    long-term liabilities                                                  |   |                                                                                                                            | 82.8    |   |             |   | 46.3    |              |   |   | 15.4             |   |   |             | ---      |   |   |   | 144.5 |   |
|                                                                                            |   |                                                                                                                            | 101.3   |   |             |   | 70.2    |              |   |   | 32.2             |   |   |             | ---      |   |   |   | 203.7 |   |
| **Notes,                    Mortgage Notes and Obligations**                                    |   |                                                                                                                            |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |
| **     Payable,                    Less Current Maturities**           |   |                                                                                                                            | 1,311.2 |   |             |   | 30.5    |              |   |   | 7.9              |   |   |             | ---      |   |   |   | 1,349.6 |   |
|                                                                                            |   |                                                                                                                            |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |   |   |   |
| Stockholder's                    investment                                                     |   |                                                                                                                            | 596.5   |   |             |   | 1,736.8 |              |   |   | 69.4             |   |   |             | (1,806.2 | ) |   |   | 596.5 |   |
|      Total                    liabilities and stockholder's investment |   | $                                                                                                                               | 2,125.6 |   |             | $      | 2,163.5 |              |   | $      | 272.0            |   |   | $                | (1,806.2 | ) |   | $ | 2,754.9 |   |

**Unaudited        Condensed Consolidating Balance Sheet**

**As        of December 31, 2006**

|                                                                                            |   |                                                                                                                                              |    |   | **Guarantor**    |   |    | **Non-Guarantor** |   |   |             |   |   | **Nortek**       |     |
|-------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|---------|--------|------------------|--------|---------|-------------------|--------|--------|------------------|--------|--------|------------------|----------|
|                                                                                            |   | **Parent**                                                                                                                                        |    |   | **Subsidiaries** |   |    | **Subsidiaries**  |   |   | **Eliminations** |   |   | **Consolidated** |     |
|                                                                                            |   |   *(Dollar                    amounts in millions)*               |    |
| **ASSETS:**                                                                                     |   |                                                                                                                                              |    |   |             |   |    |              |   |   |             |   |   |             |     |
| **Current                    Assets:**                                                          |   |                                                                                                                                              |    |   |             |   |    |              |   |   |             |   |   |             |     |
| Unrestricted                    cash and cash equivalents                                       |   | $                                                                                                                                                 | 11.5    |   |             | $      | 5.1     |              |   | $      | 40.8             |   |   | $                | ---      |   |   | $ | 57.4 |   |
| Restricted                    cash                                                              |   |                                                                                                                                              | ---     |   |             |   | 1.2     |              |   |   | ---              |   |   |             | ---      |   |   |   | 1.2 |   |
| Accounts                    receivable, less allowances                                         |   |                                                                                                                                              | ---     |   |             |   | 237.0   |              |   |   | 91.9             |   |   |             | ---      |   |   |   | 328.9 |   |
| Intercompany                    receivables (payables)                                          |   |                                                                                                                                              | 1.6     |   |             |   | (1.5    | )                 |   |   | (0.1             | )      |   |             | ---      |   |   |   | --- |   |
| Inventories                                                                                     |   |                                                                                                                                              | ---     |   |             |   | 225.6   |              |   |   | 53.0             |   |   |             | ---      |   |   |   | 278.6 |   |
| Prepaid                    expenses                                                             |   |                                                                                                                                              | 2.0     |   |             |   | 8.2     |              |   |   | 3.5              |   |   |             | ---      |   |   |   | 13.7 |   |
| Other                    current                    assets                                      |   |                                                                                                                                              | 10.3    |   |             |   | 2.8     |              |   |   | 11.3             |   |   |             | ---      |   |   |   | 24.4 |   |
| Prepaid                    income                    taxes                                      |   |                                                                                                                                              | 0.4     |   |             |   | 19.8    |              |   |   | 1.0              |   |   |             | ---      |   |   |   | 21.2 |   |
|      Total                    current assets                           |   |                                                                                                                                              | 25.8    |   |             |   | 498.2   |              |   |   | 201.4            |   |   |             | ---      |   |   |   | 725.4 |   |
| **Property                    and Equipment, at Cost:**                                         |   |                                                                                                                                              |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |
| Total                    property                    and equipment, net                         |   |                                                                                                                                              | 1.4     |   |             |   | 144.0   |              |   |   | 77.1             |   |   |             | ---      |   |   |   | 222.5 |   |
| **Other                    Long-term Assets:**                                                  |   |                                                                                                                                              |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |   |   |   |
| Investment                    in                    subsidiaries and long-term                  |   |                                                                                                                                              |    |   |             |   |    |              |   |   |             |   |   |
|    receivable                    from (to) subsidiaries                          |   |                                                                                                                                              | 1,937.9 |   |             |   | (96.9   | )                 |   |   | (61.1            | )      |   |             | (1,779.9 | ) |   |   | --- |   |
| Goodwill                                                                                        |   |                                                                                                                                              | ---     |   |             |   | 1,455.9 |              |   |   | 25.5             |   |   |             | ---      |   |   |   | 1,481.4 |   |
| Intangible                    assets, less accumulated amortization                             |   |                                                                                                                                              | 0.8     |   |             |   | 127.3   |              |   |   | 22.3             |   |   |             | ---      |   |   |   | 150.4 |   |
| Other                    assets                                                                 |   |                                                                                                                                              | 40.1    |   |             |   | 6.7     |              |   |   | 0.8              |   |   |             | ---      |   |   |   | 47.6 |   |
|      Total                    other long-term assets                   |   |                                                                                                                                              | 1,978.8 |   |             |   | 1,493.0 |              |   |   | (12.5            | )      |   |             | (1,779.9 | ) |   |   | 1,679.4 |   |
|      Total                    assets                                   |   | $                                                                                                                                                 | 2,006.0 |   |             | $      | 2,135.2 |              |   | $      | 266.0            |   |   | $                | (1,779.9 | ) |   | $ | 2,627.3 |   |
| **LIABILITIES                    AND STOCKHOLDER'S**                                            |   |                                                                                                                                              |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |
| **     INVESTMENT:**                                                   |   |                                                                                                                                              |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |   |   |   |
| **Current                    Liabilities:**                                                     |   |                                                                                                                                              |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |   |   |   |
| Notes                    payable                    and other short-term obligations            |   | $                                                                                                                                                 | 10.0    |   |             |   | ---     |              |   | $      | 13.3             |   |   | $                | ---      |   |   | $ | 23.3 |   |
| Current                    maturities of long-term debt                                         |   |                                                                                                                                              | 7.9     |   |             |   | 9.4     |              |   |   | 2.7              |   |   |             | ---      |   |   |   | 20.0 |   |
| Accounts                    payable                                                             |   |                                                                                                                                              | 2.9     |   |             |   | 110.8   |              |   |   | 74.5             |   |   |             | ---      |   |   |   | 188.2 |   |
| Accrued                    expenses and taxes, net                                              |   |                                                                                                                                              | 14.9    |   |             |   | 216.0   |              |   |   | 51.9             |   |   |             | ---      |   |   |   | 282.8 |   |
|      Total                    current liabilities                      |   |                                                                                                                                              | 35.7    |   |             |   | 336.2   |              |   |   | 142.4            |   |   |             | ---      |   |   |   | 514.3 |   |
| **Other                    Liabilities:**                                                       |   |                                                                                                                                              |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |   |   |   |
| Deferred                    income taxes                                                        |   |                                                                                                                                              | (9.5    | )      |             |   | 26.6    |              |   |   | 16.8             |   |   |             | ---      |   |   |   | 33.9 |   |
| Long-term                    payable to affiliate                                               |   |                                                                                                                                              | 24.9    |   |             |   | ---     |              |   |   | ---              |   |   |             | ---      |   |   |   | 24.9 |   |
| Other                    long-term liabilities                                                  |   |                                                                                                                                              | 67.1    |   |             |   | 46.4    |              |   |   | 15.3             |   |   |             | ---      |   |   |   | 128.8 |   |
|                                                                                            |   |                                                                                                                                              | 82.5    |   |             |   | 73.0    |              |   |   | 32.1             |   |   |             | ---      |   |   |   | 187.6 |   |
| **Notes,                    Mortgage Notes and Obligations**                                    |   |                                                                                                                                              |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |
| **     Payable,                    Less Current Maturities**           |   |                                                                                                                                              | 1,324.7 |   |             |   | 28.5    |              |   |   | 9.1              |   |   |             | ---      |   |   |   | 1,362.3 |   |
|                                                                                            |   |                                                                                                                                              |    |   |             |   |    |              |   |   |             |   |   |             |     |   |   |   |   |   |
| Stockholder's                    investment                                                     |   |                                                                                                                                              | 563.1   |   |             |   | 1,697.5 |              |   |   | 82.4             |   |   |             | (1,779.9 | ) |   |   | 563.1 |   |
|      Total                    liabilities and stockholder's investment |   | $                                                                                                                                                 | 2,006.0 |   |             | $      | 2,135.2 |              |   | $      | 266.0            |   |   | $                | (1,779.9 | ) |   | $ | 2,627.3 |   |

**Unaudited        Condensed Consolidating Statement of Operations**

**For        the second quarter ended June 30, 2007**

|                                                                               |   |                                                                                  |   |   | **Guarantor**    |   |   | **Non-Guarantor** |   |   |             |   |   | **Nortek**       |   |
|------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|--------|------------------|--------|--------|-------------------|--------|--------|------------------|--------|--------|------------------|--------|
|                                                                               |   | **Parent**                                                                            |   |   | **Subsidiaries** |   |   | **Subsidiaries**  |   |   | **Eliminations** |   |   | **Consolidated** |   |
|                                                                               |   | *(Dollar                    amounts in millions)*       |   |
|                                                                               |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |
| **Net                    Sales**                                                   |   | $                                                                                     | ---    |   |             | $      | 531.4  |              |   | $      | 159.2            |   |   | $                | (46.3  | ) |   | $ | 644.3 |   |
|                                                                               |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
| **Costs                    and expenses:**                                         |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
|                       Costs of products sold                             |   |                                                                                  | ---    |   |             |   | 371.4  |              |   |   | 127.0            |   |   |             | (46.3  | ) |   |   | 452.1 |   |
|                       Selling, general and administrative expenses, net  |   |                                                                                  | 7.1    |   |             |   | 90.7   |              |   |   | 23.3             |   |   |             | ---    |   |   |   | 121.1 |   |
|                       Amortization of intangible assets                  |   |                                                                                  | 0.1    |   |             |   | 5.7    |              |   |   | 0.6              |   |   |             | ---    |   |   |   | 6.4 |   |
|                                                                               |   |                                                                                  | 7.2    |   |             |   | 467.8  |              |   |   | 150.9            |   |   |             | (46.3  | ) |   |   | 579.6 |   |
| Operating                    (loss) earnings                                       |   |                                                                                  | (7.2   | )      |             |   | 63.6   |              |   |   | 8.3              |   |   |             | ---    |   |   |   | 64.7 |   |
| Interest                    expense                                                |   |                                                                                  | (29.3  | )      |             |   | (1.0   | )                 |   |   | (0.5             | )      |   |             | ---    |   |   |   | (30.8 | ) |
| Investment                    income                                               |   |                                                                                  | 0.1    |   |             |   | 0.1    |              |   |   | 0.3              |   |   |             | ---    |   |   |   | 0.5 |   |
| (Loss)                    income                    before charges and allocations |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |
|                       to subsidiaries and equity in subsidiaries'        |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |
|                       earnings (loss) before income taxes                |   |                                                                                  | (36.4  | )      |             |   | 62.7   |              |   |   | 8.1              |   |   |             | ---    |   |   |   | 34.4 |   |
| Charges                    and                    allocations to subsidiaries and  |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |
|                       equity in subsidiaries' earnings (loss)            |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
|                       before income taxes                                |   |                                                                                  | 70.8   |   |             |   | (16.1  | )                 |   |   | 0.8              |   |   |             | (55.5  | ) |   |   | --- |   |
| Earnings                    (loss) before provision                                |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
|                       (benefit) for income taxes                         |   |                                                                                  | 34.4   |   |             |   | 46.6   |              |   |   | 8.9              |   |   |             | (55.5  | ) |   |   | 34.4 |   |
| Provision                    (benefit) for income taxes                            |   |                                                                                  | 15.7   |   |             |   | 17.4   |              |   |   | 4.3              |   |   |             | (21.7  | ) |   |   | 15.7 |   |
|                       Net earnings (loss)                                |   | $                                                                                     | 18.7   |   |             | $      | 29.2   |              |   | $      | 4.6              |   |   | $                | (33.8  | ) |   | $ | 18.7 |   |

**Unaudited        Condensed Consolidating Statement of Operations**

**For        the second quarter ended July 1, 2006**

|                                                                               |   |                                                                                  |   |   | **Guarantor**    |   |   | **Non-Guarantor** |   |   |             |   |   | **Nortek**       |   |
|------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|--------|------------------|--------|--------|-------------------|--------|--------|------------------|--------|--------|------------------|--------|
|                                                                               |   | **Parent**                                                                            |   |   | **Subsidiaries** |   |   | **Subsidiaries**  |   |   | **Eliminations** |   |   | **Consolidated** |   |
|                                                                               |   | *(Dollar                    amounts in millions)*       |   |
|                                                                               |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |
| **Net                    Sales**                                                   |   | $                                                                                     | ---    |   |             | $      | 464.4  |              |   | $      | 138.3            |   |   | $                | (38.9  | ) |   | $ | 563.8 |   |
|                                                                               |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
| **Costs                    and expenses:**                                         |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
|                       Costs of products sold                             |   |                                                                                  | ---    |   |             |   | 323.9  |              |   |   | 108.7            |   |   |             | (38.9  | ) |   |   | 393.7 |   |
|                       Selling, general and administrative expenses, net  |   |                                                                                  | 6.3    |   |             |   | 42.5   |              |   |   | 18.5             |   |   |             | ---    |   |   |   | 67.3 |   |
|                       Amortization of intangible assets                  |   |                                                                                  | 0.1    |   |             |   | 5.0    |              |   |   | 0.7              |   |   |             | ---    |   |   |   | 5.8 |   |
|                                                                               |   |                                                                                  | 6.4    |   |             |   | 371.4  |              |   |   | 127.9            |   |   |             | (38.9  | ) |   |   | 466.8 |   |
| Operating                    (loss) earnings                                       |   |                                                                                  | (6.4   | )      |             |   | 93.0   |              |   |   | 10.4             |   |   |             | ---    |   |   |   | 97.0 |   |
| Interest                    expense                                                |   |                                                                                  | (27.2  | )      |             |   | (0.5   | )                 |   |   | (0.3             | )      |   |             | ---    |   |   |   | (28.0 | ) |
| Investment                    income                                               |   |                                                                                  | 0.4    |   |             |   | ---    |              |   |   | 0.1              |   |   |             | ---    |   |   |   | 0.5 |   |
| (Loss)                    income                    before charges and allocations |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |
|                       to subsidiaries and equity in subsidiaries'        |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |
|                       earnings (loss) before income taxes                |   |                                                                                  | (33.2  | )      |             |   | 92.5   |              |   |   | 10.2             |   |   |             | ---    |   |   |   | 69.5 |   |
| Charges                    and                    allocations to subsidiaries and  |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |
|                       equity in subsidiaries' earnings (loss)            |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
|                       before income taxes                                |   |                                                                                  | 102.7  |   |             |   | (21.5  | )                 |   |   | 0.1              |   |   |             | (81.3  | ) |   |   | --- |   |
| Earnings                    (loss) before provision                                |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
|                       (benefit) for income taxes                         |   |                                                                                  | 69.5   |   |             |   | 71.0   |              |   |   | 10.3             |   |   |             | (81.3  | ) |   |   | 69.5 |   |
| Provision                    (benefit) for income taxes                            |   |                                                                                  | 26.4   |   |             |   | 25.9   |              |   |   | 4.1              |   |   |             | (30.0  | ) |   |   | 26.4 |   |
|                       Net earnings (loss)                                |   | $                                                                                     | 43.1   |   |             | $      | 45.1   |              |   | $      | 6.2              |   |   | $                | (51.3  | ) |   | $ | 43.1 |   |

**Unaudited        Condensed Consolidating Statement of Operations**

**For        the first six months ended June 30, 2007**

|                                                                                    |   |                                                                                  |   |   | **Guarantor**    |   |   | **Non-Guarantor** |   |   |             |   |   | **Nortek**       |   |
|-----------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|--------|------------------|--------|--------|-------------------|--------|--------|------------------|--------|--------|------------------|--------|
|                                                                                    |   | **Parent**                                                                            |   |   | **Subsidiaries** |   |   | **Subsidiaries**  |   |   | **Eliminations** |   |   | **Consolidated** |   |
|                                                                                    |   | *(Dollar                    amounts in millions)*       |   |
|                                                                                    |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |
| **Net                    Sales**                                                        |   | $                                                                                     | ---    |   |             | $      | 975.3  |              |   | $      | 304.1            |   |   | $                | (82.6  | ) |   | $ | 1,196.8 |   |
|                                                                                    |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
| **Costs                    and expenses:**                                              |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
|                        Costs of products sold                            |   |                                                                                  | ---    |   |             |   | 677.4  |              |   |   | 241.9            |   |   |             | (82.6  | ) |   |   | 836.7 |   |
|                        Selling, general and administrative expenses, net |   |                                                                                  | 13.7   |   |             |   | 180.7  |              |   |   | 43.7             |   |   |             | ---    |   |   |   | 238.1 |   |
|                        Amortization of intangible assets                 |   |                                                                                  | 0.2    |   |             |   | 11.0   |              |   |   | 1.2              |   |   |             | ---    |   |   |   | 12.4 |   |
|                                                                                    |   |                                                                                  | 13.9   |   |             |   | 869.1  |              |   |   | 286.8            |   |   |             | (82.6  | ) |   |   | 1,087.2 |   |
| Operating                    (loss) earnings                                            |   |                                                                                  | (13.9  | )      |             |   | 106.2  |              |   |   | 17.3             |   |   |             | ---    |   |   |   | 109.6 |   |
| Interest                    expense                                                     |   |                                                                                  | (57.5  | )      |             |   | (1.6   | )                 |   |   | (0.9             | )      |   |             | ---    |   |   |   | (60.0 | ) |
| Investment                    income                                                    |   |                                                                                  | 0.3    |   |             |   | 0.1    |              |   |   | 0.5              |   |   |             | ---    |   |   |   | 0.9 |   |
| (Loss)                    income                    before charges and allocations      |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |
|                       to subsidiaries and equity in subsidiaries'             |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
|                       earnings (loss) before income taxes                     |   |                                                                                  | (71.1  | )      |             |   | 104.7  |              |   |   | 16.9             |   |   |             | ---    |   |   |   | 50.5 |   |
| Charges                    and                    allocations to subsidiaries and       |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |
|                       equity in subsidiaries' earnings (loss)                 |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
|                       before income taxes                                     |   |                                                                                  | 121.6  |   |             |   | (28.2  | )                 |   |   | 1.2              |   |   |             | (94.6  | ) |   |   | --- |   |
| Earnings                    (loss) before provision                                     |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
|                       (benefit) for income taxes                              |   |                                                                                  | 50.5   |   |             |   | 76.5   |              |   |   | 18.1             |   |   |             | (94.6  | ) |   |   | 50.5 |   |
| Provision                    (benefit) for income taxes                                 |   |                                                                                  | 22.6   |   |             |   | 28.5   |              |   |   | 8.0              |   |   |             | (36.5  | ) |   |   | 22.6 |   |
|                        Net earnings (loss)                               |   | $                                                                                     | 27.9   |   |             | $      | 48.0   |              |   | $      | 10.1             |   |   | $                | (58.1  | ) |   | $ | 27.9 |   |

**Unaudited        Condensed Consolidating Statement of Operations**

**For        the first six months ended July 1, 2006**

|                                                                               |   |                                                                                  |   |   | **Guarantor**    |   |   | **Non-Guarantor** |   |   |             |   |   | **Nortek**       |   |
|------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|--------|------------------|--------|--------|-------------------|--------|--------|------------------|--------|--------|------------------|--------|
|                                                                               |   | **Parent**                                                                            |   |   | **Subsidiaries** |   |   | **Subsidiaries**  |   |   | **Eliminations** |   |   | **Consolidated** |   |
|                                                                               |   | *(Dollar                    amounts in millions)*       |   |
|                                                                               |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |
| **Net                    Sales**                                                   |   | $                                                                                     | ---    |   |             | $      | 907.3  |              |   | $      | 268.6            |   |   | $                | (77.6  | ) |   | $ | 1,098.3 |   |
|                                                                               |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
| **Costs                    and expenses:**                                         |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
|                       Costs of products sold                             |   |                                                                                  | ---    |   |             |   | 627.6  |              |   |   | 214.2            |   |   |             | (77.6  | ) |   |   | 764.2 |   |
|                       Selling, general and administrative expenses, net  |   |                                                                                  | 12.8   |   |             |   | 114.5  |              |   |   | 35.1             |   |   |             | ---    |   |   |   | 162.4 |   |
|                       Amortization of intangible assets                  |   |                                                                                  | 0.3    |   |             |   | 8.5    |              |   |   | 1.2              |   |   |             | ---    |   |   |   | 10.0 |   |
|                                                                               |   |                                                                                  | 13.1   |   |             |   | 750.6  |              |   |   | 250.5            |   |   |             | (77.6  | ) |   |   | 936.6 |   |
| Operating                    (loss) earnings                                       |   |                                                                                  | (13.1  | )      |             |   | 156.7  |              |   |   | 18.1             |   |   |             | ---    |   |   |   | 161.7 |   |
| Interest                    expense                                                |   |                                                                                  | (54.3  | )      |             |   | (1.1   | )                 |   |   | (0.6             | )      |   |             | ---    |   |   |   | (56.0 | ) |
| Investment                    income                                               |   |                                                                                  | 1.0    |   |             |   | ---    |              |   |   | 0.2              |   |   |             | ---    |   |   |   | 1.2 |   |
| (Loss)                    income                    before charges and allocations |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |
|                       to subsidiaries and equity in subsidiaries'        |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
|                       earnings (loss) before income taxes                |   |                                                                                  | (66.4  | )      |             |   | 155.6  |              |   |   | 17.7             |   |   |             | ---    |   |   |   | 106.9 |   |
| Charges                    and                    allocations to subsidiaries and  |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |
|                       equity in subsidiaries' earnings (loss)            |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
|                       before income taxes                                |   |                                                                                  | 173.3  |   |             |   | (34.2  | )                 |   |   | 0.2              |   |   |             | (139.3 | ) |   |   | --- |   |
| Earnings                    (loss) before provision                                |   |                                                                                  |   |   |             |   |   |              |   |   |             |   |   |             |   |   |   |   |   |   |
|                       (benefit) for income taxes                         |   |                                                                                  | 106.9  |   |             |   | 121.4  |              |   |   | 17.9             |   |   |             | (139.3 | ) |   |   | 106.9 |   |
| Provision                    (benefit) for income taxes                            |   |                                                                                  | 40.6   |   |             |   | 44.4   |              |   |   | 6.9              |   |   |             | (51.3  | ) |   |   | 40.6 |   |
|                       Net earnings (loss)                                |   | $                                                                                     | 66.3   |   |             | $      | 77.0   |              |   | $      | 11.0             |   |   | $                | (88.0  | ) |   | $ | 66.3 |   |

**Unaudited        Condensed Consolidating Cash Flow Statement**

**For        the first six months ended June 30, 2007**

|                                                                                                 |   |                                                                |   |   | **Guarantor**    |   |   | **Non-Guarantor** |   |   | **Nortek**       |   |
|------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|--------|------------------|--------|--------|-------------------|--------|--------|------------------|--------|
|                                                                                                 |   | **Parent**                                                          |   |   | **Subsidiaries** |   |   | **Subsidiaries**  |   |   | **Consolidated** |   |
|                                                                                                 |   | *(Dollar                    amounts in millions)*    |   |
| **Cash                    Flows from operating activities:**                                         |   |                                                                |   |   |             |   |   |              |   |   |             |   |
| Net                    cash                    (used in) provided by operating activities            |   | $                                                                   | (48.4  | )      |             | $      | 93.1   |              |   | $      | 1.4              |   |   | $ | 46.1 |   |
| **Cash                    Flows from investing activities:**                                         |   |                                                                |   |   |             |   |   |              |   |   |             |   |   |   |   |   |
| Capital                    expenditures                                                              |   |                                                                | ---    |   |             |   | (9.6   | )                 |   |   | (4.5             | )      |   |   | (14.1 | ) |
| Net                    cash paid                    for businesses acquired                          |   |                                                                | ---    |   |             |   | (76.3  | )                 |   |   | ---              |   |   |   | (76.3 | ) |
| Payment                    in                    connection with NTK Holdings senior                 |   |                                                                |   |   |             |   |   |              |   |   |             |   |   |
|    unsecured                    loan facility rollover                                |   |                                                                | (4.5   | )      |             |   | ---    |              |   |   | ---              |   |   |   | (4.5 | ) |
| Proceeds                    from                    the sale of property and equipment               |   |                                                                | ---    |   |             |   | 0.1    |              |   |   | ---              |   |   |   | 0.1 |   |
| Change                    in                    restricted cash and marketable securities            |   |                                                                | ---    |   |             |   | 1.2    |              |   |   | ---              |   |   |   | 1.2 |   |
| Other,                    net                                                                        |   |                                                                | ---    |   |             |   | (0.5   | )                 |   |   | (0.1             | )      |   |   | (0.6 | ) |
|      Net                    cash used in investing activities               |   |                                                                | (4.5   | )      |             |   | (85.1  | )                 |   |   | (4.6             | )      |   |   | (94.2 | ) |
| **Cash                    Flows from financing activities:**                                         |   |                                                                |   |   |             |   |   |              |   |   |             |   |   |   |   |   |
| Increase                    in                    borrowings                                         |   |                                                                | 84.0   |   |             |   | ---    |              |   |   | 5.0              |   |   |   | 89.0 |   |
| Payment                    of                    borrowings                                          |   |                                                                | (14.4  | )      |             |   | (3.3   | )                 |   |   | (5.3             | )      |   |   | (23.0 | ) |
|      Net                    cash provided by (used in) financing activities |   |                                                                | 69.6   |   |             |   | (3.3   | )                 |   |   | (0.3             | )      |   |   | 66.0 |   |
| Net                    change in                    unrestricted cash and cash equivalents           |   |                                                                | 16.7   |   |             |   | 4.7    |              |   |   | (3.5             | )      |   |   | 17.9 |   |
| Unrestricted                    cash and cash equivalents at the beginning                           |   |                                                                |   |   |             |   |   |              |   |
|                       of the period                                                        |   |                                                                | 11.5   |   |             |   | 5.1    |              |   |   | 40.8             |   |   |   | 57.4 |   |
| Unrestricted                    cash and cash equivalents at the end                                 |   |                                                                |   |   |             |   |   |              |   |   |             |   |   |
|                       of the period                                                        |   | $                                                                   | 28.2   |   |             | $      | 9.8    |              |   | $      | 37.3             |   |   | $ | 75.3 |   |

**Unaudited        Condensed Consolidating Cash Flow Statement**

**For        the first six months ended July 1, 2006**

|                                                                                                 |   |                                              |   |   | **Guarantor**    |   |   | **Non-Guarantor** |   |   | **Nortek**       |   |
|------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|--------|--------|------------------|--------|--------|-------------------|--------|--------|------------------|--------|
|                                                                                                 |   | **Parent**                                        |   |   | **Subsidiaries** |   |   | **Subsidiaries**  |   |   | **Consolidated** |   |
|                                                                                                 |   | *(Dollar                    amounts in millions)* |   |
| **Cash                    Flows from operating activities:**                                         |   |                                              |   |   |             |   |   |              |   |   |             |   |
| Net                    cash                    (used in) provided by operating activities            |   | $                                                 | (39.3  | )      |             | $      | 62.6   |              |   | $      | 34.7             |   |   | $ | 58.0 |   |
| **Cash                    Flows from investing activities:**                                         |   |                                              |   |   |             |   |   |              |   |   |             |   |   |   |   |   |
| Capital                    expenditures                                                              |   |                                              | (0.1   | )      |             |   | (10.6  | )                 |   |   | (12.0            | )      |   |   | (22.7 | ) |
| Net                    cash paid                    for businesses acquired                          |   |                                              | ---    |   |             |   | (56.9  | )                 |   |   | ---              |   |   |   | (56.9 | ) |
| Proceeds                    from                    the sale of property and equipment               |   |                                              | 1.9    |   |             |   | 0.6    |              |   |   | 0.1              |   |   |   | 2.6 |   |
| Other,                    net                                                                        |   |                                              | (0.9   | )      |             |   | (1.4   | )                 |   |   | (0.3             | )      |   |   | (2.6 | ) |
|      Net                    cash provided by (used in) investing activities |   |                                              | 0.9    |   |             |   | (68.3  | )                 |   |   | (12.2            | )      |   |   | (79.6 | ) |
| **Cash                    Flows from financing activities:**                                         |   |                                              |   |   |             |   |   |              |   |   |             |   |   |   |   |   |
| Increase                    in                    borrowings                                         |   |                                              | 55.0   |   |             |   | 13.8   |              |   |   | 0.1              |   |   |   | 68.9 |   |
| Payment                    of                    borrowings                                          |   |                                              | (34.0  | )      |             |   | (5.1   | )                 |   |   | (0.9             | )      |   |   | (40.0 | ) |
| Dividends                                                                                            |   |                                              | (28.1  | )      |             |   | ---    |              |   |   | ---              |   |   |   | (28.1 | ) |
| Other,                    net                                                                        |   |                                              | (1.5   | )      |             |   | ---    |              |   |   | ---              |   |   |   | (1.5 | ) |
|      Net                    cash (used in) provided by financing activities |   |                                              | (8.6   | )      |             |   | 8.7    |              |   |   | (0.8             | )      |   |   | (0.7 | ) |
| Net                    change in                    unrestricted cash and cash equivalents           |   |                                              | (47.0  | )      |             |   | 3.0    |              |   |   | 21.7             |   |   |   | (22.3 | ) |
| Unrestricted                    cash and cash equivalents at the beginning                           |   |                                              |   |   |             |   |   |              |   |
|   of                    the period                                                         |   |                                              | 57.2   |   |             |   | 3.6    |              |   |   | 16.4             |   |   |   | 77.2 |   |
| Unrestricted                    cash and cash equivalents at the end                                 |   |                                              |   |   |             |   |   |              |   |   |             |   |   |
|   of                    the period                                                         |   | $                                                 | 10.2   |   |             | $      | 6.6    |              |   | $      | 38.1             |   |   | $ | 54.9 |   |

**Item        2.      Management’s        Discussion and Analysis of Financial Condition and Results of        Operations**

| ·   | the                  Residential Ventilation Products, or RVP,                  segment, |
|--------------------|------------------------------------------------------------------------------------------|

| ·   | the                  Home Technology Products, or HTP, segment,                  and |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | the                  Air Conditioning and Heating Products, or HVAC,                  segment. |
|--------------------|------------------------------------------------------------------------------------------------|

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

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

| ·   | indoor                  air quality products. |
|--------------------|-----------------------------------------------|

| ·   | audio                  / video distribution and control                  equipment, |
|--------------------|-------------------------------------------------------------------------------------|

| ·   | speakers                  and subwoofers, |
|--------------------|-------------------------------------------|

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

| ·   | power                  conditioners and surge protectors, |
|--------------------|-----------------------------------------------------------|

| ·   | audio                  / video wall mounts and fixtures, |
|--------------------|----------------------------------------------------------|

| ·   | lighting                  controls, and |
|--------------------|-----------------------------------------|

| ·   | structured                  wiring. |
|--------------------|-------------------------------------|

| ·   | split                  system air conditioners and heat                  pumps, |
|--------------------|---------------------------------------------------------------------------------|

| ·   | furnaces                  and related equipment, |
|--------------------|--------------------------------------------------|

| ·   | air                  handlers, and |
|--------------------|------------------------------------|

| ·   | large                  custom roof top cooling and heating                  products. |
|--------------------|---------------------------------------------------------------------------------------|

***Financial        Statement Presentation***

***Acquisitions***

|  Acquired                  Company                          |  Date                  of Acquisition |  Primary                  Business of                  Acquired Company                                                                                                                                                                                                                  | ReportingSegment |
|------------------------------------------------------------------|--------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| Home                  Logic, LLC                                 | July                  27, 2007             | Design                  and sale of software and hardware that facilitates the control                  of third                  party residential subsystems such as home theatre, whole-house                  audio,                  climate control, lighting, security and irrigation. | HTP              |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| Aigis                  Mechtronics, Inc.                         | July                  23, 2007             | Manufacture                  and sale of equipment, such as cameras, and housings into the                  close-circuit television portion of the global security                  market.                                                                                                  | HTP              |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| International                  Electronics, Inc.                 | June                  25, 2007             | Design                  and sale of security and access control components and systems                  for use in                  residential and light commercial applications.                                                                                                            | HTP              |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| c.p.                  All Star Corporation                       | April                  10, 2007            | Manufacture                  and distribution of residential, commercial and industrial gate                  operators,                  garage door openers, radio controls and accessory products for                  the garage                  door and fence industry.                | HTP              |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| LiteTouch,                  Inc.                                 | March                  2, 2007             | Design,                  manufacture and sale of automated lighting controls for a variety                  of uses                  including residential, commercial, new construction and retro-fit                  applications.                                                         | HTP              |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| Gefen,                  Inc.                                     | December                  12, 2006         | Design                  and sale of audio and video products which extend, switch, distribute                  and                  convert signals in a variety of formats, including high definition,                  for                  both the residential and commercial markets.    | HTP              |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| Zephyr                  Corporation                              | November                  17, 2006         | Design                  and sale of upscale range hoods.                                                                                                                                                                                                                                      | RVP              |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| Pacific                  Zephyr Range Hood, Inc.                 | November                  17, 2006         | Design,                  sale and installation of range hoods and other kitchen products                  for Asian                  cooking markets in the United States.                                                                                                                    | RVP              |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| Magenta                  Research, Ltd.                          | July                  18, 2006             | Design                  and sale of products that distribute audio and video signals over                  Category                  5 and fiber optic cable to multiple display screens.                                                                                                     | HTP              |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| Secure                  Wireless, Inc.                           | June                  26, 2006             | Design                  and sale of wireless security products for the residential and                  commercial                  markets.                                                                                                                                                  | HTP              |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| Advanced                  Bridging Technologies, Inc.            | June                  26, 2006             | Design                  and sale of innovative radio frequency control products and                  accessories.                                                                                                                                                                             | HTP              |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| Huntair,                  Inc.                                   | April                  14, 2006            | Design,                  manufacture and sale of custom air handlers and related products                  for                  commercial and clean room applications.                                                                                                                       | HVAC             |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| Cleanpak                  International, LLC                     | April                  14, 2006            | Design,                  manufacture and sale of custom air handlers and related products                  for                  commercial and clean room applications.                                                                                                                       | HVAC             |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| Furman                  Sound, Inc.                              | February                  22, 2006         | Design                  and sale of audio and video signal processors and innovative power                  conditioning and surge protection products.                                                                                                                                       | HTP              |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| Mammoth                  (Zhejiang) EG Air Conditioning Ltd. (1) | January                  25, 2006          | Design,                  manufacture and sale of commercial HVAC products, including water                  source                  heat pumps.                                                                                                                                               | HVAC             |
|                                                             |                                       |                                                                                                                                                                                                                                                                                          |             |
| Shanghai                  Mammoth Air Conditioning Co., Ltd. (1) | January                  25, 2006          | Design,                  manufacture and sale of commercial HVAC products, including water                  source                  heat pumps.                                                                                                                                               | HVAC             |

|   | (1)                      On January 25, 2006, the Company increased its ownership to                  60%.  On June 15, 2007, the Company increased this ownership                  from 60% to 75%. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Critical        Accounting Policies***

| ·   | Revenue                  Recognition, Accounts Receivable and Related                  Expenses |
|--------------------|-------------------------------------------------------------------------------------------------|

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

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

| ·   | Goodwill                  and Other Long-Lived Assets |
|--------------------|-------------------------------------------------------|

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

| ·   | Insurance                  Liabilities, and |
|--------------------|---------------------------------------------|

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

**Results        of Operations**

|                                                                                                    |   | **For                    the second quarter ended**                                                           |   |   | **Net                    Change**  |
|---------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------|
|                                                                                                    |   | **June                    30, 2007**                                                                          |   |   | **July                    1, 2006**     |   |   |  **$** |   |   |   | **%** |
|                                                                                                    |   | *(Dollar                    amounts in millions)*           |   |
| **Net                    sales:**                                                                       |   |                                                                                                          |   |   |                                    |   |   |   |   |   |   |   |   |
| Residential                    ventilation products                                                     |   | $                                                                                                             | 206.1  |   |                                    | $ | 207.3 |   |   | $ | (1.2 | ) |   |   | (0.6 | )% |
| Home                    technology products                                                             |   |                                                                                                          | 143.9  |   |                                    |   | 115.1 |   |   |   | 28.8 |   |   |   | 25.0 |   |
| Air                    conditioning and heating products                                                |   |                                                                                                          | 294.3  |   |                                    |   | 241.4 |   |   |   | 52.9 |   |   |   | 21.9 |   |
|                        Consolidated net sales                                            |   | $                                                                                                             | 644.3  |   |                                    | $ | 563.8 |   |   | $ | 80.5 |   |   |   | 14.3 | % |
| **Operating                    earnings:**                                                              |   |                                                                                                          |   |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                    ventilation products (1)                                                 |   | $                                                                                                             | 26.0   |   |                                    | $ | 69.8 |   |   | $ | (43.8 | ) |   |   | (62.8 | )% |
| Home                    technology products (2)                                                         |   |                                                                                                          | 23.3   |   |                                    |   | 14.4 |   |   |   | 8.9 |   |   |   | 61.8 |   |
| Air                    conditioning and heating products (3)                                            |   |                                                                                                          | 22.7   |   |                                    |   | 19.3 |   |   |   | 3.4 |   |   |   | 17.6 |   |
|                        Subtotal                                                          |   |                                                                                                          | 72.0   |   |                                    |   | 103.5 |   |   |   | (31.5 | ) |   |   | (30.4 | ) |
| **Unallocated:**                                                                                        |   |                                                                                                          |   |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based                    compensation charges                                                     |   |                                                                                                          | (0.1   | )      |                                    |   | (0.1 | ) |   |   | --- |   |   |   | --- |   |
| Foreign                    exchange gain on intercompany debt                                           |   |                                                                                                          | 0.2    |   |                                    |   | 0.2 |   |   |   | --- |   |   |   | --- |   |
| Unallocated,                    net                                                                     |   |                                                                                                          | (7.4   | )      |                                    |   | (6.6 | ) |   |   | (0.8 | ) |   |   | (12.1 | ) |
|                        Consolidated operating earnings                                   |   | $                                                                                                             | 64.7   |   |                                    | $ | 97.0 |   |   | $ | (32.3 | ) |   |   | (33.3 | )% |
| **Depreciation                    and amortization expense:**                                           |   |                                                                                                          |   |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                    ventilation products                                                     |   | $                                                                                                             | 5.4    |   |                                    | $ | 4.8 |   |   | $ | 0.6 |   |   |   | 12.5 | % |
| Home                    technology products                                                             |   |                                                                                                          | 4.6    |   |                                    |   | 3.2 |   |   |   | 1.4 |   |   |   | 43.8 |   |
| Air                    conditioning and heating products (4)                                            |   |                                                                                                          | 6.3    |   |                                    |   | 7.7 |   |   |   | (1.4 | ) |   |   | (18.2 | ) |
| Unallocated                                                                                             |   |                                                                                                          | 0.2    |   |                                    |   | 0.4 |   |   |   | (0.2 | ) |   |   | (50.0 | ) |
|                                                                                                    |   | $                                                                                                             | 16.5   |   |                                    | $ | 16.1 |   |   | $ | 0.4 |   |   |   | 2.5 | % |
| **Operating                    earnings margin:**                                                       |   |                                                                                                          |   |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                    ventilation products (1)                                                 |   |                                                                                                          | 12.6   | %      |                                    |   | 33.7 | % |   |   |   |   |   |   |   |   |
| Home                    technology products (2)                                                         |   |                                                                                                          | 16.2   |   |                                    |   | 12.5 |   |   |   |   |   |   |   |   |   |
| Air                    conditioning and heating products (3)                                            |   |                                                                                                          | 7.7    |   |                                    |   | 8.0 |   |   |   |   |   |   |   |   |   |
|                        Consolidated                                                      |   |                                                                                                          | 10.0   | %      |                                    |   | 17.2 | % |   |   |   |   |   |   |   |   |
| ****Depreciation                    and amortization**expense as a % of net                    sales:** |   |                                                                                                          |   |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                    ventilation products                                                     |   |                                                                                                          | 2.6    | %      |                                    |   | 2.3 | % |   |   |   |   |   |   |   |   |
| Home                    technology products                                                             |   |                                                                                                          | 3.2    |   |                                    |   | 2.8 |   |   |   |   |   |   |   |   |   |
| Air                    conditioning and heating products (4)                                            |   |                                                                                                          | 2.1    |   |                                    |   | 3.2 |   |   |   |   |   |   |   |   |   |
|                        Consolidated                                                      |   |                                                                                                          | 2.6    | %      |                                    |   | 2.9 | % |   |   |   |   |   |   |   |   |

|  | (1) | The                  operating results of the RVP segment for the second quarter ended                  June 30,                  2007 include an approximate $0.8 million charge related to the                  closure of                  the Company’s NuTone, Inc. Cincinnati, Ohio facility (see Note H of the                  Notes to the Unaudited Financial Statements included elsewhere                  herein),                  legal and other professional fees and expenses incurred in connection                  with                  matters related to certain subsidiaries based in Italy and Poland                  of                  approximately $0.3 million (see Note G of the Notes to the Unaudited                  Financial Statements included elsewhere herein) and a non-cash                  foreign                  exchange loss of approximately $0.5 million related to intercompany                  debt                  not indefinitely invested in the Company’s subsidiaries.  The                  operating results of the RVP segment for the second quarter ended                  July 1,                  2006 include an approximate $35.9 million curtailment gain related                  to                  post-retirement medical benefits and an approximate $3.5 million                  charge                  related to the planned closure of the Company’s NuTone, Inc. Cincinnati,                  Ohio facility. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | The                  operating results of the HTP segment for the second quarter ended                  June 30,                  2007 include a charge of approximately $0.5 million related to                  a reserve                  for amounts due from a customer and a decrease in warranty expense                  of                  approximately $0.2 million related to a product safety                  upgrade.  The operating results of the HTP segment for the                  second quarter ended July 1, 2006 include an increase in warranty                  expense                  of approximately $4.0 million related to a product safety                  upgrade. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                       (3)   | The                  operating results of the HVAC segment for the second quarter ended                  June                  30, 2007 include a charge of approximately $0.3 million related                  to the                  planned closure of the Company’s Mammoth, Inc. Chaska, Minnesota                  manufacturing facility (see Note H of the Notes to the Unaudited                  Financial                  Statements included elsewhere                  herein). |
|-----------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                       (4)   | Includes                  amortization of approximately $2.1 million for the second quarter                  ended                  July 1, 2006 of excess purchase price allocated to inventory recorded                  as a                  non-cash charge to cost of products                  sold. |
|-----------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                        |   | **For                    the first six months ended**                                                         |    |   | **Net                    Change**  |
|-------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|---------|--------|-----------------------------------------|
|                                                                                                        |   | **June                    30, 2007**                                                                          |    |   | **July                    1, 2006**     |   |   |  **$** |   |   |   | **%** |
|                                                                                                        |   | *(Dollar                    amounts in millions)*           |    |
| **Net                    sales:**                                                                           |   |                                                                                                          |    |   |                                    |   |   |   |   |   |   |   |   |
| Residential                    ventilation products                                                         |   | $                                                                                                             | 414.8   |   |                                    | $ | 418.9 |   |   | $ | (4.1 | ) |   |   | (1.0 | )% |
| Home                    technology products                                                                 |   |                                                                                                          | 267.1   |   |                                    |   | 222.6 |   |   |   | 44.5 |   |   |   | 20.0 |   |
| Air                    conditioning and heating products                                                    |   |                                                                                                          | 514.9   |   |                                    |   | 456.8 |   |   |   | 58.1 |   |   |   | 12.7 |   |
|                        Consolidated net sales                                                |   | $                                                                                                             | 1,196.8 |   |                                    | $ | 1,098.3 |   |   | $ | 98.5 |   |   |   | 9.0 | % |
| **Operating                    earnings:**                                                                  |   |                                                                                                          |    |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                    ventilation products (1)                                                     |   | $                                                                                                             | 51.2    |   |                                    | $ | 105.9 |   |   | $ | (54.7 | ) |   |   | (51.7 | )% |
| Home                    technology products (2)                                                             |   |                                                                                                          | 39.8    |   |                                    |   | 31.7 |   |   |   | 8.1 |   |   |   | 25.6 |   |
| Air                    conditioning and heating products (3)                                                |   |                                                                                                          | 32.5    |   |                                    |   | 37.2 |   |   |   | (4.7 | ) |   |   | (12.6 | ) |
|     Subtotal                                                                            |   |                                                                                                          | 123.5   |   |                                    |   | 174.8 |   |   |   | (51.3 | ) |   |   | (29.3 | ) |
| **Unallocated:**                                                                                            |   |                                                                                                          |    |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based                    compensation charges                                                         |   |                                                                                                          | (0.2    | )      |                                    |   | (0.2 | ) |   |   | --- |   |   |   | --- |   |
| Foreign                    exchange gain on intercompany debt                                               |   |                                                                                                          | 0.3     |   |                                    |   | 0.3 |   |   |   | --- |   |   |   | --- |   |
| Unallocated,                    net                                                                         |   |                                                                                                          | (14.0   | )      |                                    |   | (13.2 | ) |   |   | (0.8 | ) |   |   | (6.1 | ) |
|                        Consolidated operating earnings                                       |   | $                                                                                                             | 109.6   |   |                                    | $ | 161.7 |   |   | $ | (52.1 | ) |   |   | (32.2 | )% |
| **Depreciation                    and amortization expense:**                                               |   |                                                                                                          |    |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                    ventilation products                                                         |   | $                                                                                                             | 9.7     |   |                                    | $ | 9.5 |   |   | $ | 0.2 |   |   |   | 2.1 | % |
| Home                    technology products (4)                                                             |   |                                                                                                          | 8.6     |   |                                    |   | 6.2 |   |   |   | 2.4 |   |   |   | 38.7 |   |
| Air                    conditioning and heating products (5)                                                |   |                                                                                                          | 12.3    |   |                                    |   | 12.0 |   |   |   | 0.3 |   |   |   | 2.5 |   |
| Unallocated                                                                                                 |   |                                                                                                          | 0.5     |   |                                    |   | 0.6 |   |   |   | (0.1 | ) |   |   | (16.7 | ) |
|                                                                                                        |   | $                                                                                                             | 31.1    |   |                                    | $ | 28.3 |   |   | $ | 2.8 |   |   |   | 9.9 | % |
| **Operating                    earnings margin:**                                                           |   |                                                                                                          |    |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                    ventilation products (1)                                                     |   |                                                                                                          | 12.3    | %      |                                    |   | 25.3 | % |   |   |   |   |   |   |   |   |
| Home                    technology products (2)                                                             |   |                                                                                                          | 14.9    |   |                                    |   | 14.2 |   |   |   |   |   |   |   |   |   |
| Air                    conditioning and heating products (3)                                                |   |                                                                                                          | 6.3     |   |                                    |   | 8.1 |   |   |   |   |   |   |   |   |   |
|                        Consolidated                                                          |   |                                                                                                          | 9.2     | %      |                                    |   | 14.7 | % |   |   |   |   |   |   |   |   |
| **Depreciation                        and amortization**expense as a % of net                        sales: |   |                                                                                                          |    |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Residential                    ventilation products                                                         |   |                                                                                                          | 2.3     | %      |                                    |   | 2.3 | % |   |   |   |   |   |   |   |   |
| Home                    technology products (4)                                                             |   |                                                                                                          | 3.2     |   |                                    |   | 2.8 |   |   |   |   |   |   |   |   |   |
| Air                    conditioning and heating products (5)                                                |   |                                                                                                          | 2.4     |   |                                    |   | 2.6 |   |   |   |   |   |   |   |   |   |
|                        Consolidated                                                          |   |                                                                                                          | 2.6     | %      |                                    |   | 2.6 | % |   |   |   |   |   |   |   |   |

|  | (1) | The                  operating results of the RVP segment for the first six months ended                  June                  30, 2007 include an approximate $1.4 million charge related to                  the closure                  of the Company’s NuTone, Inc. Cincinnati, Ohio facility (see Note H of the                  Notes to the Unaudited Financial Statements included elsewhere                  herein),                  legal and other professional fees and expenses incurred in connection                  with                  matters related to certain subsidiaries based in Italy and Poland                  of                  approximately $1.3 million (see Note G of the Notes to the Unaudited                  Financial Statements included elsewhere herein) and a non-cash                  foreign                  exchange loss of approximately $0.4 million related to intercompany                  debt                  not indefinitely invested in the Company’s subsidiaries.  The                  operating results of the RVP segment for the first six months ended                  July                  1, 2006 include an approximate $35.9 million curtailment gain related                  to                  post-retirement medical benefits, an approximate $3.5 million charge                  related to the planned closure of the Company’s NuTone, Inc. Cincinnati,                  Ohio facility and an increase in warranty expense of approximately                  $1.5                  million related to a product safety                  upgrade. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | The                  operating results of the HTP segment for the second quarter ended                  June 30,                  2007 include a charge of approximately $0.5 million related to                  a reserve                  for amounts due from a customer and a decrease in warranty expense                  of                  approximately $0.2 million related to a product safety                  upgrade.  The operating results of the HTP segment for the first                  six months ended July 1, 2006 include an increase in warranty expense                  of                  approximately $4.0 million related to a product safety                  upgrade. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | The                  operating results of the HVAC segment for the first six months                  ended June                  30, 2007 include a charge of approximately $0.3 million related                  to the                  planned closure of the Company’s Mammoth, Inc. Chaska, Minnesota                  manufacturing facility (see Note H of the Notes to the Unaudited                  Financial                  Statements included elsewhere herein) and a charge of approximately                  $1.8                  million related to a reserve for amounts due from a                  customer. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (4) | Includes                  amortization of approximately $0.1 million for the first six months                  ended                  July 1, 2006 of excess purchase price allocated to inventory recorded                  as a                  non-cash charge to cost of products                  sold. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (5) | Includes                  amortization of approximately $2.1 million for the first six months                  ended                  July 1, 2006 of excess purchase price allocated to inventory recorded                  as a                  non-cash charge to cost of products                  sold. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                              |   |                                                                                      |   |   |                                           |   |   | **Change                  in earnings in**    |
|-------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|----------------------------------------------------|
|                                                              |   |                                                                                      |   |   |                                           |   |   | **the                  second quarter 2007**  |
|                                                              |   |                                                                                      |   |   |                                           |   |   | **as                  compared to the**       |
|                                                              |   | **For                  the second quarter ended**                                         |   |   | **second                  quarter 2006**  |
|                                                              |   | **June                  30, 2007**                                                        |   |   | **July                  1, 2006**              |   |   |  **$**                                        |   |   |   | **%** |
|                                                              |   | *(Dollar                  amounts in millions)*        |   |
|                                                              |   |                                                                                      |   |   |                                           |   |   |                                               |   |   |   |   |   |
| Net                  sales                                        |   | $                                                                                         | 644.3  |   |                                           | $      | 563.8  |                                               |   | $ | 80.5 |   |   |   | 14.3 | % |
| Cost                  of                  products sold           |   |                                                                                      | 452.1  |   |                                           |   | 393.7  |                                               |   |   | (58.4 | ) |   |   | (14.8 | ) |
| Selling,                  general and administrative expense, net |   |                                                                                      | 121.1  |   |                                           |   | 67.3   |                                               |   |   | (53.8 | ) |   |   | (79.9 | ) |
| Amortization                  of intangible assets                |   |                                                                                      | 6.4    |   |                                           |   | 5.8    |                                               |   |   | (0.6 | ) |   |   | (10.3 | ) |
| Operating                  earnings                               |   |                                                                                      | 64.7   |   |                                           |   | 97.0   |                                               |   |   | (32.3 | ) |   |   | (33.3 | ) |
| Interest                  expense                                 |   |                                                                                      | (30.8  | )      |                                           |   | (28.0  | )                                                  |   |   | (2.8 | ) |   |   | (10.0 | ) |
| Investment                  income                                |   |                                                                                      | 0.5    |   |                                           |   | 0.5    |                                               |   |   | --- |   |   |   | --- |   |
| Earnings                  before provision for income taxes       |   |                                                                                      | 34.4   |   |                                           |   | 69.5   |                                               |   |   | (35.1 | ) |   |   | (50.5 | ) |
| Provision                  for                  income taxes      |   |                                                                                      | 15.7   |   |                                           |   | 26.4   |                                               |   |   | 10.7 |   |   |   | 40.5 |   |
| Net                  earnings                                     |   | $                                                                                         | 18.7   |   |                                           | $      | 43.1   |                                               |   | $ | (24.4 | ) |   |   | (56.6 | )% |

|                                                                |   |                                           |   |   |                                                 |   |   | **Change                    in percentage for**  |
|---------------------------------------------------------------------|--------|------------------------------------------------|--------|--------|------------------------------------------------------|--------|--------|-------------------------------------------------------|
|                                                                |   | **Percentage                    of net sales** |   |   | **the                    second quarter 2007**  |
|                                                                |   | **second                    quarter ended**    |   |   | **as                    compared to the**       |
|                                                                |   | **June                    30, 2007**           |   |   | **July                    1, 2006**                  |   |   | **second                    quarter 2006**       |
|                                                                |   |                                           |   |   |                                                 |   |   |                                                  |   |
| Net                    sales                                        |   |                                           | 100.0  | %      |                                                 |   | 100.0  | %                                                     |   |   | --- | % |
| Cost                    of                    products sold         |   |                                           | 70.2   |   |                                                 |   | 69.8   |                                                  |   |   | (0.4 | ) |
| Selling,                    general and administrative expense, net |   |                                           | 18.8   |   |                                                 |   | 12.0   |                                                  |   |   | (6.8 | ) |
| Amortization                    of intangible assets                |   |                                           | 1.0    |   |                                                 |   | 1.0    |                                                  |   |   | --- |   |
| Operating                    earnings                               |   |                                           | 10.0   |   |                                                 |   | 17.2   |                                                  |   |   | (7.2 | ) |
| Interest                    expense                                 |   |                                           | (4.8   | )      |                                                 |   | (5.0   | )                                                     |   |   | 0.2 |   |
| Investment                    income                                |   |                                           | 0.1    |   |                                                 |   | 0.1    |                                                  |   |   | --- |   |
| Earnings                    before provision for income taxes       |   |                                           | 5.3    |   |                                                 |   | 12.3   |                                                  |   |   | (7.0 | ) |
| Provision                    for                    income taxes    |   |                                           | 2.4    |   |                                                 |   | 4.7    |                                                  |   |   | 2.3 |   |
| Net                    earnings                                     |   |                                           | 2.9    | %      |                                                 |   | 7.6    | %                                                     |   |   | (4.7 | )% |

|                                                                |   |                                                                                              |    |   |                                               |   |    | **Change                    in earnings in**      |
|---------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|---------|--------|----------------------------------------------------|--------|---------|--------------------------------------------------------|
|                                                                |   |                                                                                              |    |   |                                               |   |    | **the                    first six months 2007**  |
|                                                                |   |                                                                                              |    |   |                                               |   |    | **as                    compared to the**         |
|                                                                |   | **For                    the first six months ended**                                             |    |   | **first                    six months 2006**  |
|                                                                |   | **June                    30, 2007**                                                              |    |   | **July                    1, 2006**                |   |    |  **$**                                            |   |   |   | **%** |
|                                                                |   | *(Dollar                    amounts in millions)*         |
|                                                                |   |                                                                                              |    |   |                                               |   |    |                                                   |   |   |   |   |   |
| Net                    sales                                        |   | $                                                                                                 | 1,196.8 |   |                                               | $      | 1,098.3 |                                                   |   | $ | 98.5 |   |   |   | 9.0 | % |
| Cost                    of                    products sold         |   |                                                                                              | 836.7   |   |                                               |   | 764.2   |                                                   |   |   | (72.5 | ) |   |   | (9.5 | ) |
| Selling,                    general and administrative expense, net |   |                                                                                              | 238.1   |   |                                               |   | 162.4   |                                                   |   |   | (75.7 | ) |   |   | (46.6 | ) |
| Amortization                    of intangible assets                |   |                                                                                              | 12.4    |   |                                               |   | 10.0    |                                                   |   |   | (2.4 | ) |   |   | (24.0 | ) |
| Operating                    earnings                               |   |                                                                                              | 109.6   |   |                                               |   | 161.7   |                                                   |   |   | (52.1 | ) |   |   | (32.2 | ) |
| Interest                    expense                                 |   |                                                                                              | (60.0   | )      |                                               |   | (56.0   | )                                                      |   |   | (4.0 | ) |   |   | (7.1 | ) |
| Investment                    income                                |   |                                                                                              | 0.9     |   |                                               |   | 1.2     |                                                   |   |   | (0.3 | ) |   |   | (25.0 | ) |
| Earnings                    before provision for income taxes       |   |                                                                                              | 50.5    |   |                                               |   | 106.9   |                                                   |   |   | (56.4 | ) |   |   | (52.8 | ) |
| Provision                    for                    income taxes    |   |                                                                                              | 22.6    |   |                                               |   | 40.6    |                                                   |   |   | 18.0 |   |   |   | 44.3 |   |
| Net                    earnings                                     |   | $                                                                                                 | 27.9    |   |                                               | $      | 66.3    |                                                   |   | $ | (38.4 | ) |   |   | (57.9 | )% |

|                                                                |   |                                           |   |   |                                                   |   |   | **Change                    in percentage for**  |
|---------------------------------------------------------------------|--------|------------------------------------------------|--------|--------|--------------------------------------------------------|--------|--------|-------------------------------------------------------|
|                                                                |   | **Percentage                    of net sales** |   |   | **the                    first six months 2007**  |
|                                                                |   | **first                    six months ended**  |   |   | **as                    compared to the**         |
|                                                                |   | **June                    30, 2007**           |   |   | **July                    1, 2006**                    |   |   | **first                    six months 2006**     |
|                                                                |   |                                           |   |   |                                                   |   |   |                                                  |   |
| Net                    sales                                        |   |                                           | 100.0  | %      |                                                   |   | 100.0  | %                                                     |   |   | --- | % |
| Cost                    of                    products sold         |   |                                           | 69.9   |   |                                                   |   | 69.6   |                                                  |   |   | (0.3 | ) |
| Selling,                    general and administrative expense, net |   |                                           | 19.9   |   |                                                   |   | 14.8   |                                                  |   |   | (5.1 | ) |
| Amortization                    of intangible assets                |   |                                           | 1.0    |   |                                                   |   | 0.9    |                                                  |   |   | (0.1 | ) |
| Operating                    earnings                               |   |                                           | 9.2    |   |                                                   |   | 14.7   |                                                  |   |   | (5.5 | ) |
| Interest                    expense                                 |   |                                           | (5.1   | )      |                                                   |   | (5.1   | )                                                     |   |   | --- |   |
| Investment                    income                                |   |                                           | 0.1    |   |                                                   |   | 0.1    |                                                  |   |   | --- |   |
| Earnings                    before provision for income taxes       |   |                                           | 4.2    |   |                                                   |   | 9.7    |                                                  |   |   | (5.5 | ) |
| Provision                    for                    income taxes    |   |                                           | 1.9    |   |                                                   |   | 3.7    |                                                  |   |   | 1.8 |   |
| Net                    earnings                                     |   |                                           | 2.3    | %      |                                                   |   | 6.0    | %                                                     |   |   | (3.7 | )% |

*Net        Sales.  *

*Cost        of Products Sold.  *

*Selling,        General and Administrative Expense, Net.  *

*Amortization        of Intangible Assets.  *

*Depreciation        Expense.  *

*Operating        Earnings.  *

*Interest        Expense.  *

*Investment        Income.  *

*Provision        for Income Taxes.  *

*Net        Earnings.*

*EBITDA.  *

|                                                             |   | **For                    the second quarter ended** |   |
|------------------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                             |   | **June                    30, 2007**                |   |   | **July                    1, 2006** |   |
|                                                             |   | *(Dollar                    amounts in millions)*   |   |
|                                                             |   |                                                |   |   |   |   |
| Net                    earnings                    (1), (2)      |   | $                                                   | 18.7   |   |   | $ | 43.1 |   |
| Provision                    for                    income taxes |   |                                                | 15.7   |   |   |   | 26.4 |   |
| Interest                    expense  (3)               |   |                                                | 30.8   |   |   |   | 28.0 |   |
| Investment                    income                             |   |                                                | (0.5   | ) |   |   | (0.5 | ) |
| Depreciation                    expense                          |   |                                                | 10.1   |   |   |   | 8.2 |   |
| Amortization                    expense                          |   |                                                | 6.4    |   |   |   | 7.9 |   |
| EBITDA                                                           |   | $                                                   | 81.2   |   |   | $ | 113.1 |   |

|   | (1) | In                  the RVP segment, net earnings for the second quarter ended June                  30, 2007                  include an approximate $0.8 million charge related to the closure                  of the                  Company’s NuTone, Inc. Cincinnati, Ohio facility (see Note H of the Notes                  to the Unaudited Financial Statements included elsewhere herein),                  legal                  and other professional fees and expenses incurred in connection                  with                  matters related to certain subsidiaries based in Italy and Poland                  of                  approximately $0.3 million (see Note G of the Notes to the Unaudited                  Financial Statements included elsewhere herein) and a non-cash                  foreign                  exchange loss of approximately $0.5 million related to intercompany                  debt                  not indefinitely invested in the Company’s subsidiaries.  In the                  HTP segment, net earnings for the second quarter ended June 30,                  2007                  include a charge of approximately $0.5 million related to a reserve                  for                  amounts due from a customer and a decrease in warranty expense                  of                  approximately $0.2 million related to a product safety                  upgrade.  In the HVAC segment, net earnings for the second                  quarter ended June 30, 2007 include a charge of approximately $0.3                  million                  related to the planned closure of the Company’s Mammoth, Inc. Chaska,                  Minnesota manufacturing facility (see Note H of the Notes to the                  Unaudited                  Financial Statements included elsewhere herein).  In                  Unallocated, net earnings for the second quarter ended June 30,                  2007                  includes a non-cash foreign exchange gain of approximately $0.2                  million                  related to intercompany debt not indefinitely invested in the Company’s                  subsidiaries and stock-based compensation charges of approximately                  $0.1                  million. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | In                  the RVP segment, net earnings for the second quarter ended July                  1, 2006                  include an approximate $35.9 million curtailment gain related to                  post-retirement medical benefits and an approximate $3.5 million                  charge                  related to the planned closure of the Company’s NuTone, Inc. Cincinnati,                  Ohio facility (see Note H of the Notes to the Unaudited Financial                  Statements included elsewhere herein).  In the HTP segment, net                  earnings for the second quarter ended July 1, 2006 include an increase                  in                  warranty expense of approximately $4.0 million related to a product                  safety                  upgrade.  In Unallocated, net earnings for the second quarter                  ended July 1, 2006 includes a non-cash foreign exchange gain of                  approximately $0.2 million related to intercompany debt not indefinitely                  invested in the Company’s subsidiaries and stock-based compensation                  charges of approximately $0.1                  million. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Interest                  expense for the second quarter of 2007 includes cash interest of                  approximately $29.4 million and non-cash interest of approximately                  $1.4                  million.  Interest expense for the second quarter of 2006                  includes cash interest of approximately $26.8 million and non-cash                  interest of approximately $1.2                  million. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                             |   | **For                    the first six months ended** |   |
|------------------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                             |   | **June                    30, 2007**                  |   |   | **July                    1, 2006** |   |
|                                                             |   | *(Dollar                    amounts in millions)*     |   |
|                                                             |   |                                                  |   |   |   |   |
| Net                    earnings                    (1), (2)      |   | $                                                     | 27.9   |   |   | $ | 66.3 |   |
| Provision                    for                    income taxes |   |                                                  | 22.6   |   |   |   | 40.6 |   |
| Interest                    expense  (3)               |   |                                                  | 60.0   |   |   |   | 56.0 |   |
| Investment                    income                             |   |                                                  | (0.9   | ) |   |   | (1.2 | ) |
| Depreciation                    expense                          |   |                                                  | 18.7   |   |   |   | 16.1 |   |
| Amortization                    expense                          |   |                                                  | 12.4   |   |   |   | 12.2 |   |
| EBITDA                                                           |   | $                                                     | 140.7  |   |   | $ | 190.0 |   |

|   | (1) | In                  the RVP segment, net earnings for the first six months ended June                  30, 2007                  include an approximate $1.4 million charge related to the closure                  of the                  Company’s NuTone, Inc. Cincinnati, Ohio facility (see Note H of the Notes                  to the Unaudited Financial Statements included elsewhere herein),                  legal                  and other professional fees and expenses incurred in connection                  with                  matters related to certain subsidiaries based in Italy and Poland                  of                  approximately $1.3 million (see Note G of the Notes to the Unaudited                  Financial Statements included elsewhere herein) and a non-cash                  foreign                  exchange loss of approximately $0.4 million related to intercompany                  debt                  not indefinitely invested in the Company’s subsidiaries.  In the                  HTP segment, net earnings for the first six months ended June 30,                  2007                  include a charge of approximately $0.5 million related to a reserve                  for                  amounts due from a customer and a decrease in warranty expense                  of                  approximately $0.2 million related to a product safety                  upgrade.  In the HVAC segment, net earnings for the first six                  months ended June 30, 2007 include a charge of approximately $0.3                  million                  related to the planned closure of the Company’s Mammoth, Inc. Chaska,                  Minnesota manufacturing facility (see Note H of the Notes to the                  Unaudited                  Financial Statements included elsewhere herein) and a charge of                  approximately $1.8 million related to a reserve for amounts due                  from a                  customer.  In Unallocated, net earnings for the first six months                  ended June 30, 2007 includes a non-cash foreign exchange gain of                  approximately $0.3 million related to intercompany debt not indefinitely                  invested in the Company’s subsidiaries and stock-based compensation                  charges of approximately $0.2                  million. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | In                  the RVP segment, net earnings for the first six months ended July                  1, 2006                  include an approximate $35.9 million curtailment gain related to                  post-retirement medical benefits, an approximate $3.5 million charge                  related to the planned closure of the Company’s NuTone, Inc. Cincinnati,                  Ohio facility (see Note H of the Notes to the Unaudited Financial                  Statements included elsewhere herein) and an increase in warranty                  expense                  of approximately $1.5 million related to a product safety                  upgrade.  In the HTP segment, net earnings for the first six                  months ended July 1, 2006 include an increase in warranty expense                  of                  approximately $4.0 million related to a product safety                  upgrade.  In Unallocated, net earnings for the first six months                  ended July 1, 2006 includes a non-cash foreign exchange gain of                  approximately $0.3 million related to intercompany debt not indefinitely                  invested in the Company’s subsidiaries and stock-based compensation                  charges of approximately $0.2                  million. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Interest                  expense for the first six months of 2007 includes cash interest                  of                  approximately $57.2 million and non-cash interest of approximately                  $2.8                  million.  Interest expense for the first six months of 2006                  includes cash interest of approximately $53.5 million and non-cash                  interest of approximately $2.5                  million. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Liquidity        and Capital Resources**

| ·   | On                  June 25, 2007, the Company, through Linear, acquired IEI through a                  cash tender offer to purchase all of the outstanding shares of                  common                  stock of IEI at a price of $6.65 per share.  The total purchase                  price was approximately $13.8 million, of which approximately $2.3                  million                  will be paid in the third quarter of                  2007. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                  April 10, 2007, the Company, through Linear, acquired the assets                  and                  certain liabilities of All Star for an initial purchase price of                  approximately $2.8 million (utilizing approximately $2.3 million                  of cash                  and issuing unsecured 6% subordinated notes totaling $0.5 million                  due                  April 2009). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                  March 2, 2007, the Company, through Linear, acquired the stock                  of                  LiteTouch for approximately $10.5 million (utilizing approximately                  $8.0                  million of cash and issuing unsecured 6% subordinated notes totaling                  $2.5                  million due March 2009) plus contingent consideration, which may                  be                  payable in future years. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                  June 26, 2006, the Company, through Linear, acquired the stock                  of Secure                  Wireless and ABT through two mergers for approximately $10.5 million,                  plus contingent consideration of approximately $18.1 million that                  was                  earned by Secure Wireless in 2006 and was paid in April                  2007.  Additional contingent consideration may be payable in                  future years. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                  April 14, 2006, the Company, through two newly formed subsidiaries                  of its                  HVAC segment, acquired the assets and certain liabilities of Huntair                  and                  Cleanpak, for approximately $48.4 million (utilizing approximately                  $38.4                  million of cash and issuing unsecured 6% subordinated notes totaling                  $10.0                  million due April 2008) plus contingent consideration of approximately                  $30.0 million which was earned in 2006 and was paid in April                  2007. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | During                  the first half of 2007, additional purchase price of approximately                  $1.5                  million was paid related to the acquisition of Gefen,                  Inc. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Contingent                  consideration of approximately $7.5 million related to the acquisition                  of                  OmniMount, which was accrued for at December 31, 2006, was paid                  in the                  first quarter of 2007. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                   |  *(Amounts                  in millions)*  |
|----------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------|
|                                                                                                                                   |                                                 |   |   |
| Net                  borrowings under the revolving portion of the Company's senior                  secured credit facility |                                                 | $ | 74.0 |   |
|                                                                                                                                   |                                                 |   |   |   |
| Additional                  borrowings related primarily to the Company’s foreign                  subsidiaries                  |                                                 |   | 5.7 |   |
|                                                                                                                                   |                                                 |   |   |   |
| Issuance                  of unsecured notes related to acquisitions in the first half of                  2007                        |                                                 |   | 3.0 |   |
|                                                                                                                                   |                                                 |   |   |   |
| Foreign                  currency translation                                                                                          |                                                 |   | 0.6 |   |
|                                                                                                                                   |                                                 |   |   |   |
| Principal                  payments                                                                                                    |                                                 |   | (13.0 | ) |
|                                                                                                                                   |                                                 |   |   |   |
| Net                  change in consolidated debt                                                                                       |                                                 | $ | 70.3 |   |

|                                                                                |   | **Condensed                    Consolidated**           |   |
|-------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|
|                                                                                |   | **Cash                    Flows (1)**    |   |
|                                                                                |   | **For                    the first six months ended**   |   |
|                                                                                |   | **June                    30, 2007**                    |   |   | **July                    1, 2006** |   |
|                                                                                |   | *(Dollar                    amounts in millions)*       |   |
| **Operating                    Activities:**                                        |   |                                                    |   |   |   |   |
|                       Cash flow from operations, net                      |   | $                                                       | 66.3   |   |   | $ | 70.6 |   |
|                       Change in accounts receivable, net                  |   |                                                    | (47.2  | ) |   |   | (28.5 | ) |
|                       Change in inventories                               |   |                                                    | (33.7  | ) |   |   | (37.9 | ) |
|                       Change in prepaids and other current assets         |   |                                                    | 2.3    |   |   |   | 5.3 |   |
|                       Change in accounts payable                          |   |                                                    | 49.5   |   |   |   | 27.4 |   |
|                       Change in accrued expenses and taxes                |   |                                                    | 9.7    |   |   |   | 18.3 |   |
| **Investing                    Activities:**                                        |   |                                                    |   |   |   |   |   |   |
|                       Capital expenditures                                |   |                                                    | (14.1  | ) |   |   | (22.7 | ) |
|                       Net cash paid for businesses acquired               |   |                                                    | (76.3  | ) |   |   | (56.9 | ) |
|                       Payment in connection with NTK Holdings senior      |   |                                                    |   |   |   |   |   |   |
|                          unsecured loan facility rollover  |   |                                                    | (4.5   | ) |   |   | --- |   |
|                       Proceeds from the sale of property and equipment    |   |                                                    | 0.1    |   |   |   | 2.6 |   |
|                       Change in restricted cash and marketable securities |   |                                                    | 1.2    |   |   |   | --- |   |
| **Financing                    Activities:**                                        |   |                                                    |   |   |   |   |   |   |
|                       Change in borrowings, net                           |   |                                                    | 66.0   |   |   |   | 28.9 |   |
|                       Dividends                                           |   |                                                    | ---    |   |   |   | (28.1 | ) |
| Other,                    net                                                       |   |                                                    | (1.4   | ) |   |   | (1.3 | ) |
|                                                                                |   | $                                                       | 17.9   |   |   | $ | (22.3 | ) |

|  | (1) | Summarized                  from the Company’s Unaudited Condensed Consolidated Statement of Cash                  Flows for the first six months ended June 30, 2007 and July 1,                  2006 (see                  the Unaudited Financial Statements included elsewhere                  herein). |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                      |   | **For                    the first six months ended** |   |
|-------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                                                      |   | **June                    30, 2007**                  |   |   | **July                    1, 2006** |   |
|                                                                                      |   | *(Dollar                    amounts in millions)*     |   |
|                                                                                      |   |                                                  |   |   |   |   |
|                       Net cash provided by operating activities                 |   | $                                                     | 46.1   |   |   | $ | 58.0 |   |
|                       Cash used by working capital and other long-term          |   |                                                  |   |   |   |   |   |   |
|                          asset and liability changes             |   |                                                  | 20.2   |   |   |   | 12.6 |   |
|                       Deferred federal income tax provision                     |   |                                                  | (4.1   | ) |   |   | (7.4 | ) |
|                       Loss on property and equipment                            |   |                                                  | (0.2   | ) |   |   | (1.8 | ) |
|                       Non-cash interest expense, net                            |   |                                                  | (2.8   | ) |   |   | (2.5 | ) |
|                       Non-cash stock-based compensation expense                 |   |                                                  | (0.2   | ) |   |   | (0.2 | ) |
|                       Gain from curtailment of post-retirement medical benefits |   |                                                  | ---    |   |   |   | 35.9 |   |
|                       Provision for income taxes                                |   |                                                  | 22.6   |   |   |   | 40.6 |   |
|                       Interest expense (1)                                      |   |                                                  | 60.0   |   |   |   | 56.0 |   |
|                       Investment income                                         |   |                                                  | (0.9   | ) |   |   | (1.2 | ) |
| EBITDA                    (2),                    (3)                                     |   | $                                                     | 140.7  |   |   | $ | 190.0 |   |

|   | (1) | Interest                  expense for the first six months of 2007 includes cash interest                  of                  approximately $57.2 million and non-cash interest of approximately                  $2.8                  million.  Interest expense for the first six months of 2006                  includes cash interest of approximately $53.5 million and non-cash                  interest of approximately $2.5                  million. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | In                  the RVP segment, EBITDA for the first six months ended June 30,                  2007                  include an approximate $1.4 million charge related to the closure                  of the                  Company’s NuTone, Inc. Cincinnati, Ohio facility (see Note H of the Notes                  to the Unaudited Financial Statements included elsewhere herein),                  legal                  and other professional fees and expenses incurred in connection                  with                  matters related to certain subsidiaries based in Italy and Poland                  of                  approximately $1.3 million (see Note G of the Notes to the Unaudited                  Financial Statements included elsewhere herein) and a non-cash                  foreign                  exchange loss of approximately $0.4 million related to intercompany                  debt                  not indefinitely invested in the Company’s subsidiaries.  In the                  HTP segment, net earnings for the first six months ended June 30,                  2007                  include a charge of approximately $0.5 million related to a reserve                  for                  amounts due from a customer and a decrease in warranty expense                  of                  approximately $0.2 million related to a product safety                  upgrade.  In the HVAC segment, EBITDA for the first six months                  ended June 30, 2007 include a charge of approximately $0.3 million                  related                  to the planned closure of the Company’s Mammoth, Inc. Chaska, Minnesota                  manufacturing facility (see Note H of the Notes to the Unaudited                  Financial                  Statements included elsewhere herein) and a charge of approximately                  $1.8                  million related to a reserve for amounts due from a                  customer.  In Unallocated, EBITDA for the first six months ended                  June 30, 2007 includes a non-cash foreign exchange gain of approximately                  $0.3 million related to intercompany debt not indefinitely invested                  in the                  Company’s subsidiaries. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | In                  the RVP segment, EBITDA for the first six months ended July 1,                  2006                  include an approximate $35.9 million curtailment gain related to                  post-retirement medical benefits, an approximate $3.5 million charge                  related to the planned closure of the Company’s NuTone, Inc. Cincinnati,                  Ohio facility (see Note H of the Notes to the Unaudited Financial                  Statements included elsewhere herein) and an increase in warranty                  expense                  of approximately $1.5 million related to a product safety                  upgrade.  In the HTP segment, EBITDA for the first six months                  ended July 1, 2006 include an increase in warranty expense of                  approximately $4.0 million related to a product safety                  upgrade.  In Unallocated, EBITDA for the first six months ended                  July 1, 2006 includes a non-cash foreign exchange gain of approximately                  $0.3 million related to intercompany debt not indefinitely invested                  in the                  Company’s subsidiaries. |
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**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        2.                      Unregistered        Sales of Equity Securities and Use of Proceeds**

**Item        6.                      Exhibits**

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

|   |   | /s/                Almon C. Hall |
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