Industrial Thermal Products Co.’s Shares Rise on Q3 Earnings

Source: Streetwise Reports   02/03/2022

Shares of Modine Manufacturing Co. traded 16% higher after the company reported Q3/22 financial results and reaffirmed its full-year sales and adjusted EBITDA outlook for FY/22.

After U.S. markets closed for trading yesterday, thermal management solutions and components company Modine Manufacturing Co. (MOD:NYSE), announced financial results for the third quarter of 2022 ended Dec. 31, 2021.

The company reported that net sales in Q3/22 increased by 4% to $502.2 million, compared to $484.3million in Q3/21. The firm advised that the rise in sales was driven by increased volumes and prices in its CIS, BHVAC, and Heavy Duty Equipment segments.

The firm stated that it posted operating income of $79.4 million in Q3/22, which was $188.1 million higher than the net operating loss of $108.7 million registered in Q3/21. The company advised that the change was due primarily to impairment charges that it realized during Q3/21 in its Automotive segment, some of which were reversed in Q3/22.

Modine stated that in Q3/22, it has adjusted EBITDA of $39.3 million. The company posted net income of $74.1 million in Q3/22, or $1.41 per share. The firm added that on an adjusted basis it had earnings per share of $0.31.

Modine Manufacturing’s President and Chief Executive Officer Neil D. Brinker commented, “As anticipated, we demonstrated sequential quarter-over-quarter improvement in both earnings and cash flow performance, supported by higher sales volume in our Commercial and Industrial Solutions (“CIS”) and Building HVAC Systems (“BHVAC”) segments and by pricing adjustments that helped offset inflationary pressures. … The CIS segment had a solid quarter with strong conversion on higher sales and a significant improvement in operating earnings.”

Brinker continued, “The transformation of Modine is well underway, and we are implementing plans to accelerate growth in those areas of the business with the greatest profitability and growth drivers. Those plans include the comprehensive implementation of 80/20 principles across the enterprise and the simplification of our operating structure to create a more focused organization.”

“Overall, demand remains strong across most of our end markets, but the challenging supply chain environment has not abated,” Brinker added.

The company said it is proactively taking steps to address inflationary pressures and global supply chain challenges and expects that the actions it is now taking will deliver benefits in Q4/22 and beyond.

Modine advised that it is reaffirming its FY/22 business outlook. The company stated for FY/22 it expects sales growth of 10% to 16% over FY/21. The firm indicated additionally that for FY/22 it estimates it will achieve adjusted EBITDA of $145 to $160 million.

Modine Manufacturing is headquartered in Racine, Wis., and has operations in Asia, Europe, and North and South America. The company is an original equipment manufacturer that specializes in thermal management systems and highly engineered heating and cooling components. The firm designs, manufactures, and tests heat transfer products for a wide variety of applications and its products are sold worldwide for use in the building HVAC, commercial and industrial solutions, heavy duty equipment, and automotive markets.

Modine Manufacturing has a market cap of around $479.1 million with approximately 51.85 million shares outstanding. MOD shares opened over 5% higher today at $10.04 (+$0.50, +5.24%) over yesterday’s $9.54 closing price. The company’s shares have traded today between $9.93 and $11.04 per share and are currently trading at $10.70 (+$1.46, +15.80%).

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