Modine earnings, revenue down on lower sales volume

CEO says restructuring having positive impact

Brian Agen (l) and Peggy Kelsey (c) hold a new Modine flag as Tom Burke (r) addresses employees at the corporate headquarters in Racine, WI. The event kicked off the recognition celebration of Modine's 100th Anniversary. Copyright 2016, Gregory Shaver, The Journal Times. (PRNewsFoto/Modine Manufacturing Company)

Racine-based Modine Manufacturing Co. today reported its fiscal third quarter earnings were down 15 percent and its third quarter revenue was down 9.6 percent on lower sales volumes driven by weakness in several end markets.

Brian Agen (r) and Peggy Kelsey (c) hold a new Modine flag as Tom Burke (l) addresses employees at the corporate headquarters in Racine, WI. The event kicked off the recognition celebration of Modine's 100th Anniversary. Copyright 2016, Gregory Shaver, The Journal Times. (PRNewsFoto/Modine Manufacturing Company)
Brian Agen and Peggy Kelsey hold a new Modine flag as Tom Burke addresses employees at Modine’s corporate headquarters in Racine. The event kicked off the recognition celebration of Modine’s 100th Anniversary. Copyright 2016, Gregory Shaver, The Journal Times. (PRNewsFoto/Modine Manufacturing Company)

The company reported net income of $8.2 million, or 17 cents per diluted share, for the third quarter of 2016, compared to $9.7 million, or 20 cents per share, for the same period in 2015.

Modine had revenue of $328.7 million for the quarter, down from $363.6 million during the previous year. The company reported net sales were down 2.5 percent on a consistent currency basis, with decreases in the Americas, building HVAC and Asia segments offsetting increases in the Europe segment.

Thomas Burke, Modine president and chief executive officer, said the company’s previously announced restructuring and cost-control actions had a positive impact on results for the quarter. The company reported savings from the closure of its Ringwood, Ill. manufacturing facility and the transfer of production to other facilities, but the company also recorded $1.6 million in restructuring expenses.

The company reported revenue in its Americas segment was down 10.5 percent to $137.1 million. Sales in Brazil were down $9.2 million, with $6.3 million coming from currency exchange and the rest due to weak conditions in end markets. North American sales were down 5.2 percent from weakness in the off-highway market and lower sales to commercial vehicle customers.

The Europe segment saw sales decline 8.1 percent to $126.1 million. Sales were actually up 5 percent on a constant currency basis and were driven by higher sales to commercial vehicle and automotive customers.

Asia segment sales were $18.7 million, a decrease of 7.3 percent. The decrease was 2.6 percent in consistent currency and was driven by weakness in the off-highway markets and lower tooling sales. The decrease was partially offset by higher sales to automotive customers.

The building HVAC segment saw sales decrease 9.8 percent to $50.9 million. The decrease was primarily due to lower sales in the United Kingdom as unfavorable currency conditions led to increased competition. Modine also had lower sales of heating products in North America because of a relatively warm early winter seasons.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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