Modine Manufacturing Co., (MOD)
Q1 F2011 Earnings Call
July 29, 2010 11:30 am ET
Robert Kampstra - Vice President and Chief Accounting Officer
Tom Burke - President and Chief Executive Officer
Michael B. Lucareli - Vice President of Finance and Chief Financial Officer
Walter Liptak – Barrington Research
David Leiker – Robert W. Baird
Adam Brooks - Sidoti & Company
Ann Duignan - JP Morgan
Previous Statements by MOD
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Good day ladies and gentlemen, and welcome to the First Quarter, Fiscal 2011 Modine Manufacturing Company Earnings Conference Call. My name is Chris and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator instructions). As a reminder, this conference is being recorded for replay purposes.
I would now like to turn the conference over to our host for today, Mr. Bob Kampstra, Vice President, Corporate Controller and Chief Accounting Officer; please proceed.
Good morning. Thank you for joining us today for Modine’s first quarter fiscal 2011 earnings call. With me today are Modine’s President and Chief Executive Officer, Tom Burke as well as Mick Lucareli, our Vice President of Finance, Chief Financial Officer and Treasurer.
We will be using slides with today’s presentation. Our slides are available through both the webcast link as well as a PDF file posted on the investor relations section of our company website, modine.com. Also should you need to exit the call prior to its conclusion, a replay will be available through our website beginning approximately 2 hours after the call concludes. On page 2 is an outline for today’s call. Tom and Mick will provide comments on our first quarter results, our outlook for the remainder of the year and our strategic overview.
At the end of the call will be a question-and-answer session. On page 3 is our notice regarding forward-looking statements. We want to remind you that this call may contain forward-looking statements as outlined in today’s earnings release as well as in our company’s filings with the Securities and Exchange Commission. With that, it is my pleasure to turn the call over to Tom Burke. Tom?
Thanks Bob and good morning everyone. Let’s turn to slide 4, as Bob mentioned in a few moments we will be reviewing our financial and operating performance for the first 3 months of fiscal 2011. Before we do so however, I want take this opportunity to formally introduce you to Michael B. Lucarel, who we appointed Chief Financial Officer earlier this month. I am delighted to be working with Mick in this new and well earned capacity. As many of you know, we evaluated numerous high quality candidates over the past several months. A very deliberate search process served us well. I had an opportunity during this press as to also work very closely with Mick, who emerged as a clear choice for the job because of broad financial background, in-depth knowledge of our business units and markets and perhaps most importantly, a consistent ability to link our financial and operating objectives with our primary goal of creating long-term shareholder value.
Also, many of you have gotten chance to get to know Bob Castro over the past 8 months. I am very pleased that Bob will continue to have a significant investor relations responsibility so you will continue to see in here for him in the future. I look forward to working with Mick and Bob and the other members of our senior leadership team as we continue to move our company forward to our long range objectives.
Turning now to slide five, we had a very strong quarter. Our performance reflects the significant progress we have made in transforming our company and delivering it through the economic downturn.
Our sales have improved dramatically since this time last year. The pace of the recovery is in fact more rapid than we had previously anticipated, even a few short months ago. During the quarter we saw broad based improvements highlighted by a noticeable recovery in the off-highway in commercial vehicle markets in North and South America, and strengthening based on rising export sales within the premium automotive market in Europe.
In terms of the bottom line, we reported a net earnings of $3.1 million or $0.07 per share which compares to a loss of $0.18 per share at this time last year. With these significantly improved results, we have turned a meaningful quarter corner as we move towards improved profitability.
The strategic decisions we made over the pasty 18 months are clearly beginning to produce results and with the higher sales volumes, we are seeing the benefits of our improved operating leverage. Mick will review this in greater detail in a few moments.
We are definitely building momentum in all areas of our company; our relationships with our strategic customers are leading to significant long term opportunities. Our refocused portfolio and developing technologies are delivering results. For example, we expect that our new Origami technology will assist us in achieving our stated growth objectives in the commercial vehicle market in Europe.
Our expansion of businesses in Asia is doing well as our team to China and India are delivering under many programs in our new facilities, and our commercial products group is building on the success of their recent new product introductions and laying the groundwork for significant growth in this highly profitable business segment.
In summary, we had a very strong quarter and are highly encouraged by the recent market and performance trends that we are seeing. This transforms the basis of our decision to raise our full fiscal year 2011 guidance and also provide us further confidence that we are track to attain our mid-term goal of 11-12% return on capital by the end our fiscal 2013 year.