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Sep 30, 2020
Modine Q2 2021 Earnings Report
Reported improved margins, earnings, and cash flow due to better market conditions and cost reductions.
Key Takeaways
Modine Manufacturing Company reported second quarter fiscal 2021 results with net sales of $461.4 million, operating income of $28.5 million, and net earnings of $8.9 million. The company saw improvements in margins, earnings, and cash flow due to improving market conditions and cost reduction measures. They also reached an agreement to sell the majority of their automotive business to Dana Incorporated.
Net sales decreased 8 percent from the prior year to $461.4 million.
Operating income increased to $28.5 million, up $22.5 million year-over-year, and net earnings increased to $8.9 million, up $13.7 million year-over-year.
Adjusted EBITDA increased 40 percent from the prior year to $55.4 million, driven by a 240 basis point improvement in gross margin and lower SG&A expenses.
Earnings per share was $0.17, and adjusted earnings per share was $0.43.
Forward Guidance
Based on strong second quarter results, the company provided its outlook for the full fiscal year, expecting sequential revenue improvement in the third and fourth quarters.
Positive Outlook
- Expect sequential revenue improvement in the third and fourth quarters.
- Anticipate some cost increases in the second half of the fiscal year.
- Expect full fiscal year-over-year sales down 7 to 12 percent.
- Project adjusted EBITDA of $155 million to $165 million.
- Seeing slow but steady recovery in most end markets and geographies.
Challenges Ahead
- Sales and earnings outlook remains highly uncertain.
- Expect some cost increases related to higher metals prices.
- Expect some cost increases related to employee compensation expense.
- Reversing some of the temporary cost control measures taken earlier in the year.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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