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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, 2012. Highlights include:
Sales of $326.1 million;
GAAP basis loss per share of $0.19;
Impairment and restructuring charges of $9.7 million; and
Earnings per share excluding impairment and restructuring charges of $0.02.
“Most of our end markets remain below prior year levels,” said Modine President and Chief Executive Officer, Thomas A. Burke. “Although our revenues are down, we aggressively managed our costs resulting in positive free cash flow during the quarter. We are on track with our critically important restructuring program in Europe, and expect to see benefits from this program in the new fiscal year.”
Third Quarter Financial Results
Net sales in the third quarter of fiscal 2013 decreased $47.2 million, or 12.6 percent, from the third quarter of fiscal 2012. On a constant currency basis, net sales decreased 10.2 percent from the prior year. Sales in Europe continue to be impacted by the planned wind down of the non-strategic automotive module business, while sales in all regions were affected by weak end market demand. Gross profit decreased $11.9 million or 19.8 percent, resulting in a gross margin of 14.8 percent, down 130 basis points from the prior year. The margin decrease was largely due to lower sales volume. Selling, general and administrative (SG&A) expense increased $1.6 million, or 3.9 percent, primarily due to the impact of the reversal of a trade compliance-related reserve in the prior year. The company recorded $8.3 million of impairment charges and $1.4 million of restructuring expenses primarily related to the ongoing restructuring in Europe. Operating income decreased $21.0 million to a loss of $3.8 million as a result of lower gross profit and the $9.7 million of impairment and restructuring charges. The net loss attributable to Modine of $8.7 million compares to net earnings attributable to Modine of $9.0 million for the same period last year, and represents a loss per share of $0.19 on a GAAP basis. Earnings per share excluding impairment and restructuring charges was $0.02, compared to $0.24 in the third quarter of last year.