Modine Manufacturing Company (NYSE: MOD), a diversified global leader in thermal management technology and solutions, today reported its financial results for the third quarter ended December 31, 2011. Highlights versus the same period last year include:
- Sales of $373.3 million, up 3.7 percent;
- Operating income of $16.2 million, up 77.4 percent;
- Other expense included $2.1 million of losses due to changes in foreign currency rates; and
- Net earnings of $8.3 million, resulting in diluted earnings per share of $0.18, up 50 percent.
"We had another solid quarter, with a $7.1 million or 77 percent improvement in earnings from operations," said Modine President and Chief Executive Officer, Thomas A. Burke. "Our net earnings were negatively impacted by $2.1 million of foreign exchange losses and a $2.2 million asset write-off. Despite these impacts, our earnings per share increased 50 percent.
"Also during the quarter, we began to see softening in the European truck and premium automotive markets, and our Asian customers began working down inventory levels in the construction equipment market. These factors, combined with the foreign exchange losses, are prompting us to lower full year fiscal 2012 guidance for revenue growth and earnings per share."
Third Quarter Financial Results
Net sales in the third quarter of fiscal 2012 improved $13.2 million, or 3.7 percent, from the third quarter of fiscal 2011. Excluding foreign currency, net sales increased 4.7 percent from the prior year. The most significant improvements were within the commercial vehicle and off-highway markets in North America, South America and Asia as well as in our Commercial Products segment. Gross profit increased 5.7 percent, or $3.2 million, on the increased sales volumes, resulting in a gross margin of 16.0 percent. Selling, general and administrative (SG&A) expense decreased $3.9 million year over year, primarily due to a decrease in management compensation expense and the impact of a reversal of a contingent liability related to a previously reported trade compliance issue that has been successfully resolved, partially offset by a $2.2 million asset write-off in Europe. Operating income increased $7.1 million or 77.4 percent from the third quarter of fiscal 2011 to $16.2 million, as a result of the higher gross profit and lower SG&A expenses. Other expense of $1.7 million represents a $1.9 million decrease from other income of $0.2 million during the same period last year due to unfavorable foreign currency losses on intercompany loans and other transactions denominated in foreign currencies. Net earnings of $8.3 million represents a $2.7 million improvement, or a 49.5 percent increase, from net earnings of $5.6 million for the same period last year.