Modine Manufacturing Co. (Racine, WI) reported continued improvement in its financial results for the first quarter ended June 26, 2003. Sales for the first quarter increased 6% to $288.9 million from $272.3 million reported a year ago. Net favorable currency exchange rates, primarily the stronger Euro, added about $21.4 million to first quarter sales.
Earnings before the cumulative effect of accounting change increased nearly 9% to $11.3 million, or $0.33 per fully diluted share, compared with $10.4 million, or $0.31 per fully diluted share, for the same period a year ago. Effective with the first quarter of last year (fiscal 2003), Modine adopted Statement of Financial Accounting Standard (SFAS) No. 142, "Goodwill and Other Intangible Assets," and recorded a related goodwill impairment charge of $21.7 million (net of $1.1 million income tax benefit), resulting in a loss of $11.3 million, or $0.33 per fully diluted share, for the first quarter of last year.
"We are pleased with the continued improvement in our financial results as demonstrated by the year-over-year quarterly gross margin that increased from 25.2% to 25.7%. Included in the quarter are net favorable currency benefits of approximately $2.6 million, partially offset by incremental benefits-related expenses of $1.9 million. After taking these items into consideration, our overall financial performance improved," said David Rayburn, Modine's president and chief executive officer. "Modine's earnings benefited from strong performance in the global automotive and heavy-duty businesses, partially offset by weakness in our aftermarket and electronics businesses."
