Modine Reports: increased 12 percent from the prior year

Tue Feb 07 08:59:03 CST 2023 Source: www.refindustry.com Collect Reading Volume: 706
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"The improvement in our revenue and earnings are the result of strategic actions we've proactively taken over the past year to transform Modine into a higher margin, higher return business focused on faster growing markets," said Modine President and Chief Executive Officer, Neil D. Brinker. "As we embed 80/20 into our business practices, we are focusing our resources on our best opportunities, in our most attractive markets. This is helping us improve our service to our best customers, while further focusing our technical and manufacturing resources in areas that will drive long-term profitable growth. Over the past year, we have sharpened our commercial acumen and taken commercial actions to offset inflation, while simultaneously simplifying our product lines. These activities are allowing us to increase our market share, improve our operations, and make solid progress towards our financial goals."

Financial Results

Net sales increased 12 percent in the third quarter to $560.0 million, compared with $502.2 million in the prior year. On a constant currency basis, sales increased 18 percent. The increase was driven by sales volume improvements and favorable commercial pricing in both the Climate Solutions and Performance Technologies segments.

Operating income in the third quarter was $39.5 million, compared to $79.4 million in the prior year. The decrease was primarily driven by a significant impairment reversal recorded last year. In connection with the termination of an agreement to sell the liquid-cooled automotive business, we reversed $57.2 million of previously-recorded impairment charges during the third quarter of fiscal 2022. During the third quarter of fiscal 2023, the Company recorded $0.3 million of environmental charges and $0.1 million of restructuring expenses. Excluding these items, as well as depreciation and amortization expense, adjusted EBITDA of $53.3 million increased $14.0 million, or 36 percent, compared with $39.3 million in the prior year.

Climate Solutions

Climate Solutions segment sales were $248.6 million, compared with $227.3 million one year ago, an increase of 9 percent. On a constant currency basis, sales increased 15 percent from the prior year. This increase was driven by higher sales of data center cooling, heat transfer and HVAC and refrigeration products. The segment reported gross margin of 22.0 percent, which was 360 basis points higher than the prior year, primarily due to higher sales volume and improved operating efficiencies. The segment reported operating income of $30.2 million, an 80 percent increase from the prior year. Adjusted EBITDA was $35.4 million, an increase of $11.5 million, or 48 percent, from the prior year.

 

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Editor: Amanda