Racine-based Modine Manufacturing Co. reported a slight increase in net income during the fourth quarter and earnings were up sharply in fiscal 2017.
Modine reported net income of $8 million in the fourth quarter, up from $7.6 million last year, resulting in earnings of 16 cents per diluted share in both cases. Net income for the year was $14.2 million, compared to a loss of $1.6 million last year. Earnings improved from a 3 cent loss to 29 cents per diluted share.
For the year, revenue was up from $1.35 billion to $1.5 billion. Reported revenue during the fourth quarter was up 42 percent to $488.3 million, boosted by the acquisition of Luvata Heat Transfer Solutions. The company said its base business was up 2 percent in the fourth quarter.
“We have strengthened, diversified and grown our business, positioning us already in the last quarter of fiscal 2017 to effectively offset the impact of soft conditions that remain in many of our key markets,” said Thomas Burke, Modine president and chief executive officer. “Although some of our markets remain challenged, we are starting to see improvements, particularly in the off-highway markets.”
Modine, which makes thermal management systems for vehicles and building HVAC, said its Americas segment saw a 0.4 percent decline in revenue to $144.6 million. The company pointed to ongoing weakness in the heavy-duty commercial markets.
The Europe segment was down 3.2 percent to $134.6 million, but the company said sales were flat on a constant-currency basis. Sales to automotive customers were higher while sales to commercial vehicle makers were down.
The Asia segment was a bright spot, with sales up 45.5 percent to $33.3 million. The company said sales were higher to automotive and off-highway customers in China, India and Korea.
Modine said its building HVAC segment saw higher sales of air conditioning products in the United Kingdom and lower sales of heating and ventilation products in North America. The result was a 4.1 percent decrease in revenue to $38.8 million, although sales were up 2.3 percent on a constant-currency basis.
Despite the company’s guidance calling a for 25 to 30 percent increase in revenue in fiscal 2018 driven by a full year of contributions from Luvata, the company also forecast flat to slightly up in many of the markets served by its Americas segment. When analysts pointed out industry forecasters and some OEMs had expressed more optimism, executives said they were basing the projections based on what they seen so far.
“We’re as hopeful as everybody else, it’s just after the last two years, we’d like to see more,” said Mick Lucareli, Modine chief financial officer. “We are hearing a lot of favorable news for the first time in a while, a lot of green shoots … we’d like to see more than one or two months before we change our outlook.”