Racine-based Modine Manufacturing Co., a diversified global leader in thermal management technology and solutions, this week reported financial results for the quarter ended Sept. 30.
Second quarter highlights
• Net sales of $548.9 million increased 8 percent from the prior year, 10 percent on a constant-currency basis
• Operating income of $22.8 million was down 3 percent from the prior year and adjusted operating income of $26.5 million was down 1 percent from the prior year
• Earnings per share of $0.75 more than doubled from the prior year due to favorable income tax benefits and adjusted earnings per share of $0.35 decreased $0.01 from the prior year
• Confirmed guidance for revenue and adjusted earnings per share, lowered guidance range 3 to 4 percent for adjusted operating earnings
“Our business achieved double-digit revenue growth on a constant currency basis, driven by continued global expansion and new product launches across all three of our business segments,” said Modine president and CEO, Thomas A. Burke. “Our commercial and industrial segment had an exceptional quarter, further validating our diversification strategy. The earnings conversion in our vehicular business was lower than expected due to several factors that impacted our operating performance. Many of these factors are temporary in nature, largely driven by the multiple new program launches, and we are taking actions to improve performance in the second half of the year.”
Net sales increased 8 percent in the second quarter to $548.9 million, compared with $508.3 million in the prior year. On a constant-currency basis, net sales increased 10 percent from the prior year. This increase was a result of sales growth across all business segments.
Gross profit increased 2 percent in the second quarter to $87.9 million, compared with $86.1 million in the prior year. Gross margin decreased 100 basis points to 16.0 percent, primarily due to the negative impact of higher raw material and labor costs and operating inefficiencies at certain high-volume manufacturing facilities.
Operating income decreased 3 percent in the second quarter to $22.8 million, compared with $23.5 million in the prior year. An increase in operating income for the CIS segment was more than offset by decreases in the VTS and Building HVAC segments. During the second quarter of fiscal 2019 and 2018, acquisition and integration costs, restructuring expenses, and certain other items totaled $3.7 million and $3.3 million, respectively.