RACINE – Modine
Manufacturing Company (NYSE: MOD), a diversified global leader in
thermal management technology and solutions, is reporting a an
increase in sales for its third quarter.
Sales in the
third quarter of fiscal 2015 grew $16.6 million, or 5 percent, from
the third quarter of fiscal 2014. On a constant currency basis,
sales were up 9 percent, with increases in all segments other
than South America, as economic conditions remained weak in Brazil.
increased $2.6 million, or 5 percent, and gross margin was flat at
16.4 percent, as positive volume impacts were offset by higher
materials costs. Selling, general and administrative expenses
increased $0.7 million, but were down as a percentage of sales. The
company recorded $1.9 million of restructuring expenses, of
which $0.6 million related to the ongoing restructuring program
in Europe, $0.7 million related to severance expenses in South
America, and $0.6 million related to the closure of the McHenry,
Illinois manufacturing facility in North America.
The company also
recorded a $3.2 million gain on the sale of a wind tunnel
in Europe during the quarter.
continuing operations of $9.1 million improved $12.5 million from
the prior year. Excluding restructuring expenses and the gain on the
sale of the wind tunnel, the company reported adjusted operating
income of $14.2 million, up $1.9 million from the prior year, and
adjusted earnings per share of $0.15, compared with $0.16 in the
third quarter of last year.
Free cash flow
in the quarter was $10.0 million. Net debt was $73.7 million as of
Wednesday, December 31, 2014, which is a decrease of $3.5
million from the end of fiscal 2014. Cash and cash equivalents at
the end of the third quarter were $79.9 million.
that the heating and commercial truck markets will remain strong for
the remainder of our fiscal year," said Modine President and Chief
Executive Officer, Thomas A. Burke. "However, we expect further
weakness inSouth America and in the global off-highway markets and
continued, unfavorable currency conditions. Based on these factors
and given the proximity to our fiscal year-end, we are lowering our
revenue guidance and tightening our earnings guidance range at this
Based on current
exchange rates and market outlook, Modine provides the following
guidance for fiscal 2015:
Full fiscal year-over-year sales up 1 to 3 percent, which
reflects an approximately 150 basis point reduction in sales growth
as a result of unfavorable foreign exchange rates compared to our
prior outlook of a 3 to 6 percent annual sales increase;
Adjusted operating income of $65 million to $70 million, up
from $61.3 million in fiscal 2014; and
Adjusted earnings per share of $0.63 to $0.70, reflecting the
impact of higher income tax expense following our reversal of the
U.S. valuation allowance in the fourth quarter of fiscal 2014.
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