0000067347false00000673472024-10-292024-10-29

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 29, 2024

Modine Manufacturing Company

(Exact name of registrant as specified in its charter)

Wisconsin

001-01373

39-0482000

(State or other jurisdiction of incorporation)

(Commission File Number)

(I.R.S. Employer Identification Number)

1500 DeKoven AvenueRacineWisconsin

 

53403

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code:

 

(262636-1200

 

 

 

(Former name or former address, if changed since last report.)

 

N/A

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common Stock, $0.625 par value

MOD

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Information to be Included in the Report

Item 2.02Results of Operations and Financial Condition

On October 29, 2024, Modine Manufacturing Company (the “Company”) issued a press release announcing the results of operations and financial condition for the second quarter ended September 30, 2024.

During a conference call scheduled to be held at 11:00 a.m. Eastern Time on October 30, 2024, the Company’s President and Chief Executive Officer, Neil D. Brinker, and Executive Vice President, Chief Financial Officer, Michael B. Lucareli, will discuss the Company’s results for the second quarter ended September 30, 2024.

Attached to this Current Report on Form 8-K as Exhibit 99.1 is a copy of the Company’s press release in connection with the announcement. The information in this Item 2.02, including Exhibit 99.1, is furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.

Item 9.01Financial Statements and Exhibits

(d)

Exhibits

The following exhibits are being furnished herewith:

99.1

   

Press Release dated October 29, 2024 announcing the results of operations and financial condition for the second quarter ended September 30, 2024.

104

Cover Page Interactive Data File (formatted as Inline XBRL)

2

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Modine Manufacturing Company

 

 

 

   

By: 

/s/ Neil D. Brinker

 

Neil D. Brinker

 

President and Chief Executive Officer

 

 

Date:  October 29, 2024

 

3

Exhibit 99.1

Graphic

NEWS RELEASE

FOR IMMEDIATE RELEASE

Modine Reports Second Quarter Fiscal 2025 Results

Strong quarterly results driven by strategic acquisitions and organic data center growth

Racine, WI – October 29, 2024 – Modine (NYSE: MOD), a diversified global leader in thermal management technology and solutions, today reported financial results for the quarter ended September 30, 2024.

Second Quarter Highlights:

Net sales of $658.0 million increased 6 percent from the prior year
Operating income of $75.3 million increased 15 percent from the prior year
Adjusted EBITDA of $99.8 million increased $18.6 million, or 23 percent, from the prior year
Earnings per share of $0.86 decreased $0.01 from the prior year
Adjusted earnings per share of $0.97 increased $0.08, or 9 percent, from the prior year

“Our strong second quarter results benefited from continued momentum in some of our key end markets,” said Modine President and Chief Executive Officer, Neil D. Brinker. “Data center revenue growth continues to drive top-line improvement, including the significant impact from the Scott Springfield acquisition. This more than offset lower volumes in both our vehicular end markets and in our heat transfer product business. Overall, margins improved versus the prior year, which resulted in earnings growth and supported continued momentum towards our new fiscal 2027 targets.”

Second Quarter Financial Results

Net sales increased 6 percent to $658.0 million, compared with $620.5 million in the prior year. Organic sales increased 1 percent compared with the prior year.

Gross profit increased 23 percent to $165.6 million and gross margin improved by 340 basis points to 25.2 percent, which was primarily driven by favorable sales mix, including sales from the recently-acquired Scott Springfield Manufacturing business and organic data center sales growth, and higher average selling prices.

Selling, general and administrative (“SG&A”) expenses increased $16.9 million to $85.8 million. The increase was primarily due to higher compensation-related expenses, including increased incentive compensation resulting from improved financial results, and SG&A expenses of the acquired Scott Springfield business, including $4.7 million of incremental amortization expense for acquired intangible assets.

Operating income was $75.3 million, compared to $65.7 million in the prior year, an increase of 15 percent. The increase was driven by higher gross profit as compared to the prior year, partially offset by higher SG&A and restructuring expenses. The Company recorded $4.5 million of restructuring expenses during the second quarter of fiscal 2025, primarily for severance-related expenses in Europe within the Performance Technologies segment and product line transfer costs. Adjusted EBITDA, which excludes restructuring expenses, certain other charges, and depreciation and amortization expense, was $99.8 million, an increase of $18.6 million, or 23 percent, compared with $81.2 million in the prior year. 

1


Earnings per share was $0.86, compared with $0.87 in the prior year. Adjusted earnings per share was $0.97, compared with adjusted earnings per share of $0.89 in the prior year. This improvement of $0.08, or 9 percent, was primarily driven by higher gross profit.

Second Quarter Segment Review

Climate Solutions segment sales were $366.4 million, compared with $289.2 million one year ago, an increase of 27 percent, including $53.4 million of sales from the recently-acquired Scott Springfield Manufacturing business. Organic sales increased 7 percent. This increase was driven by higher sales of data center cooling products, partially offset by lower sales of heat transfer products. The segment reported gross margin of 29.0 percent, which was 240 basis points higher than the prior year, primarily due to higher sales volume, favorable sales mix, and benefits from commercial pricing settlements. The segment reported operating income of $64.7 million, a 37 percent increase from the prior year. Adjusted EBITDA was $78.8 million, an increase of $25.2 million, or 47 percent, from the prior year.
Performance Technologies segment sales were $297.5 million, compared with $337.3 million one year ago, a decrease of 12 percent. Excluding the impact of divestitures, which was $21.9 million in the quarter, and the effect of exchange rate changes, organic sales decreased 5 percent. This decrease primarily resulted from market-related declines to automotive, off-highway and commercial vehicle customers. The segment reported gross margin of 20.2 percent, up 310 basis points from the prior year, primarily due to higher average selling prices, improved operating efficiencies, and the recognition of sales tax credits in Brazil. The segment reported operating income of $30.8 million, a $0.4 million decrease compared to the prior year, primarily due to higher restructuring expenses as compared to the prior year. Adjusted EBITDA was $41.0 million, an increase of $2.1 million, or 5 percent, from the prior year.

Balance Sheet & Liquidity

Net cash provided by operating activities for the six months ended September 30, 2024 was $97.8 million, a decrease of $13.0 million compared to the prior year. Free cash flow for the six months ended September 30, 2024 was $57.5 million, a decrease of $27.1 million from the prior year, as the impact of higher operating earnings in the current year was more than offset by unfavorable net changes in working capital and higher capital expenditures, as compared with the prior year. Cash payments for restructuring activities, acquisition and integration costs, and environmental charges during the six months ended September 30, 2024 totaled $16.8 million, a $9.2 million increase from the prior year.

Total debt was $405.4 million as of September 30, 2024. Cash and cash equivalents at September 30, 2024 were $78.6 million. Net debt was $326.8 million as of September 30, 2024, a decrease of $44.7 million from the end of fiscal 2024.

Outlook

“Our outlook for the data center business continues to improve, driven by strong organic growth and the strategic actions taken over the past year, including the acquisition of Scott Springfield,” added Brinker. “We are gaining share with both colocation and hyperscale customers and continue to expand our product offering and our manufacturing capacity to meet market demand. In the Performance Technologies segment, we remain focused on further advancing our 80/20 initiatives and improving our business mix, as we anticipate ongoing weakness in our vehicular markets. We are holding our current guidance ranges, as we work towards delivering another record year of revenue and earnings.”

Conference Call and Webcast

Modine will conduct a conference call and live webcast, with a slide presentation, on Wednesday, October 30, 2024 at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss its second quarter financial results. The webcast and accompanying slides will be available on the Investor Relations section of the Modine website at www.modine.com. Participants are encouraged to log on to the webcast and conference call about ten minutes prior to the start of the event. A replay of the audio and slides will be available on the Investor Relations section of the Modine website at www.modine.com on or after October 30, 2024. A call-in replay will be available through midnight on November 6, 2024 at 877-660-6853, (international replay 201-612-7415); Conference ID# 13748652. The Company will post a transcript of the call on its website on or after November 1, 2024.

2


About Modine

At Modine, we are Engineering a Cleaner, Healthier World™. Building on more than 100 years of excellence in thermal management, we provide trusted systems and solutions that improve air quality and conserve natural resources. More than 11,000 employees are at work in every corner of the globe, delivering the solutions our customers need, where they need them. Our Climate Solutions and Performance Technologies segments support our purpose by improving air quality, reducing energy and water consumption, lowering harmful emissions and enabling cleaner running vehicles and environmentally friendly refrigerants. Modine is a global company headquartered in Racine, Wisconsin (U.S.), with operations in North America, South America, Europe and Asia. For more information about Modine, visit www.modine.com.

Forward-Looking Statements

This press release contains statements, including information about future financial performance and market conditions, accompanied by phrases such as “believes,” “estimates,” “expects,” “plans,” “anticipates,” “intends,” “projects,” and other similar “forward-looking” statements, as defined in the Private Securities Litigation Reform Act of 1995. Modine's actual results, performance or achievements may differ materially from those expressed or implied in these statements because of certain risks and uncertainties, including, but not limited to those described under “Risk Factors” in Item 1A of Part I of the Company's Annual Report on Form 10-K for the year ended March 31, 2024 and under Forward-Looking Statements in Item 7 of Part II of that same report and in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2024. Other risks and uncertainties include, but are not limited to, the following: the impact of potential adverse developments or disruptions in the global economy and financial markets, including impacts related to inflation, energy costs, supply chain challenges or supplier constraints, logistical disruptions, tariffs, sanctions and other trade issues or cross-border trade restrictions; the impact of other economic, social and political conditions, changes and challenges in the markets where we operate and compete, including foreign currency exchange rate fluctuations, changes in interest rates, tightening of the credit markets, recession or recovery therefrom, restrictions associated with importing and exporting and foreign ownership, public health crises, and the general uncertainties, including the impact on demand for our products and the markets we serve from regulatory and/or policy changes that have been or may be implemented in the U.S. or abroad, including those related to tax and trade, climate change, public health threats, and military conflicts, including the current conflicts in Ukraine and in the Middle East and heightened tensions in the Red Sea; the overall health and pricing focus of our customers; our ability to successfully realize anticipated benefits, including improved profit margins and cash flow, from our strategic initiatives and our application of 80/20 principles across our businesses; our ability to be at the forefront of technological advances and the impacts of any changes in the adoption rate of technologies that we expect to drive sales growth; our ability to accelerate growth organically and through acquisitions and successfully integrate acquired businesses; our ability to effectively and efficiently manage our operations in response to sales volume changes, including maintaining adequate production capacity to meet demand in our growing businesses while also completing restructuring activities and realizing benefits thereof; our ability to fund our global liquidity requirements efficiently and comply with the financial covenants in our credit agreements; operational inefficiencies as a result of product or program launches, unexpected volume increases or decreases, product transfers and warranty claims; the impact on Modine of any significant increases in commodity prices, particularly aluminum, copper, steel and stainless steel (nickel) and other purchased components and related costs, and our ability to adjust product pricing in response to any such increases; our ability to recruit and maintain talent in managerial, leadership, operational and administrative functions and to mitigate increased labor costs; our ability to protect our proprietary information and intellectual property from theft or attack; the impact of any substantial disruption or material breach of our information technology (“IT”) systems; the impact of a material weakness identified in our internal controls related to IT system access in Europe on our financial reporting process; costs and other effects of environmental investigation, remediation or litigation and the increasing emphasis on environmental, social and corporate governance matters; our ability to realize the benefits of deferred tax assets; and other risks and uncertainties identified in our public filings with the U.S. Securities and Exchange Commission. Forward-looking statements are as of the date of this press release, and we do not assume any obligation to update any forward-looking statements.

3


Non-GAAP Financial Disclosures

Adjusted EBITDA, adjusted EBITDA margin, adjusted earnings per share, net debt, free cash flow, organic sales and organic sales growth (which are defined below) as used in this press release are not measures that are defined in generally accepted accounting principles (GAAP). These non-GAAP measures are used by management as performance measures to evaluate the Company’s overall financial performance and liquidity. These measures are not, and should not be viewed as, substitutes for the applicable GAAP measures, and may be different from similarly-titled measures used by other companies.

Definition – Adjusted EBITDA and adjusted EBITDA margin

The Company defines adjusted EBITDA as net earnings excluding interest expense, the provision or benefit for income taxes, depreciation and amortization expenses, other income and expense, restructuring expenses, acquisition and integration costs, and certain other gains or charges. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of net sales. The Company believes that adjusted EBITDA and adjusted EBITDA margin provide relevant measures of profitability and earnings power. The Company views these financial metrics as being useful in assessing operating performance from period to period by excluding certain items that it believes are not representative of its core business. Adjusted EBITDA, when calculated for the business segments, is defined as operating income excluding depreciation and amortization expenses, restructuring expenses, and certain other gains or charges.

Definition – Adjusted earnings per share

Diluted earnings per share plus restructuring expenses, acquisition and integration costs, and excluding changes in income tax valuation allowances and certain other gains or charges. Adjusted earnings per share is an overall performance measure, not including costs associated with restructuring and acquisitions and certain other gains or charges.

Definition – Net debt

The sum of debt due within one year and long-term debt, less cash and cash equivalents. Net debt is an indicator of the Company's debt position after considering on-hand cash balances.

Definition – Free cash flow

Free cash flow represents net cash provided by operating activities less expenditures for property, plant and equipment. Free cash flow presents cash generated from operations during the period that is available for strategic capital decisions.

Definition – Organic sales and organic sales growth

Net sales and net sales growth can be impacted by acquisitions, dispositions, and foreign currency exchange rate fluctuations. The Company defines organic sales as external net sales excluding the impact of acquisitions and the effects of foreign currency exchange rate fluctuations. Organic sales growth represents the percentage change of organic sales compared to prior year external net sales, excluding the impact of dispositions. The effect of exchange rate changes is calculated by using the same foreign currency exchange rates as those used to translate financial data for the prior period. The Company adjusts for acquisitions and dispositions by excluding net sales in the current and prior periods, respectively, for which there are no comparable sales in the reported periods. These sales growth measures provide a more consistent indication of our performance, without the effects of foreign currency exchange rate fluctuations or acquisitions and dispositions.

4


Modine Manufacturing Company

Consolidated statements of operations (unaudited)

(In millions, except per share amounts)

    

Three months ended September 30, 

    

Six months ended September 30, 

2024

    

2023

2024

    

2023

Net sales

$

658.0

$

620.5

$

1,319.5

$

1,242.9

Cost of sales

 

492.4

 

485.4

 

991.3

 

979.9

Gross profit

 

165.6

 

135.1

 

328.2

 

263.0

Selling, general & administrative expenses

 

85.8

 

68.9

 

168.6

 

130.3

Restructuring expenses

 

4.5

 

0.5

 

9.9

 

0.5

Operating income

 

75.3

 

65.7

 

149.7

 

132.2

Interest expense

 

(7.4)

 

(6.1)

 

(14.9)

 

(12.0)

Other (expense) income – net

 

(1.5)

 

0.1

 

(1.8)

 

(0.5)

Earnings before income taxes

 

66.4

 

59.7

 

133.0

 

119.7

Provision for income taxes

 

(20.0)

 

(12.8)

 

(38.8)

 

(27.5)

Net earnings

 

46.4

 

46.9

 

94.2

 

92.2

Net earnings attributable to noncontrolling interest

 

(0.3)

 

(0.4)

 

(0.8)

 

(0.9)

Net earnings attributable to Modine

$

46.1

$

46.5

$

93.4

$

91.3

Net earnings per share attributable to Modine shareholders – diluted

$

0.86

$

0.87

$

1.73

$

1.72

Weighted-average shares outstanding – diluted

 

53.9

 

53.4

 

53.9

 

53.2

Condensed consolidated balance sheets (unaudited)

(In millions)

    

September 30, 2024

    

March 31, 2024

Assets

Cash and cash equivalents

$

78.6

 

$

60.1

Trade receivables

 

452.9

 

422.9

Inventories

 

366.5

 

357.9

Other current assets

 

54.6

 

53.1

Total current assets

 

952.6

 

894.0

Property, plant and equipment – net

 

373.9

 

365.7

Intangible assets – net

 

165.8

 

188.3

Goodwill

 

240.7

 

230.9

Deferred income taxes

 

63.3

 

75.1

Other noncurrent assets

 

119.3

 

97.5

Total assets

$

1,915.6

 

$

1,851.5

Liabilities and shareholders’ equity

Debt due within one year

$

46.3

$

31.7

Accounts payable

 

295.1

 

283.4

Other current liabilities

 

195.5

 

230.7

Total current liabilities

 

536.9

 

545.8

Long-term debt

 

359.1

 

399.9

Other noncurrent liabilities

 

152.2

 

150.3

Total liabilities

 

1,048.2

 

1,096.0

Total equity

 

867.4

 

755.5

Total liabilities & equity

$

1,915.6

$

1,851.5

5


Modine Manufacturing Company

Condensed consolidated statements of cash flows (unaudited)

(In millions)

    

Six months ended September 30, 

2024

    

2023

Cash flows from operating activities:

Net earnings

$

94.2

$

92.2

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization

 

39.1

 

27.7

Stock-based compensation expense

 

9.8

 

4.6

Deferred income taxes

 

9.8

 

5.5

Other – net

 

3.4

 

3.8

Changes in operating assets and liabilities:

Trade accounts receivable

 

(25.5)

 

6.7

Inventories

 

(5.2)

 

(4.3)

Accounts payable

 

21.8

 

(43.3)

Other assets and liabilities

 

(49.6)

 

17.9

Net cash provided by operating activities

 

97.8

 

110.8

Cash flows from investing activities:

Expenditures for property, plant and equipment

 

(40.3)

 

(26.2)

Payments for business acquisitions

(3.4)

(4.8)

Other – net

 

0.5

 

(3.4)

Net cash used for investing activities

 

(43.2)

 

(34.4)

Cash flows from financing activities:

Net decrease in debt

 

(28.8)

 

(9.5)

Purchases of treasury stock

(7.8)

(10.3)

Other – net

 

(0.1)

 

1.2

Net cash used for financing activities

 

(36.7)

 

(18.6)

Effect of exchange rate changes on cash

 

0.7

 

(1.9)

Net increase in cash, cash equivalents and restricted cash

 

18.6

 

55.9

Cash, cash equivalents and restricted cash - beginning of period

 

60.3

 

67.2

Cash, cash equivalents and restricted cash - end of period

$

78.9

$

123.1

6


Modine Manufacturing Company

Segment operating results (unaudited)

(In millions)

    

Three months ended September 30, 

    

Six months ended September 30, 

    

2024

    

2023

 

2024

    

2023

Net sales:

Climate Solutions

$

366.4

$

289.2

$

723.7

$

575.9

Performance Technologies

 

297.5

 

337.3

 

606.5

 

680.4

Segment total

 

663.9

 

626.5

 

1,330.2

 

1,256.3

Corporate and eliminations

 

(5.9)

 

(6.0)

 

(10.7)

 

(13.4)

Net sales

$

658.0

$

620.5

$

1,319.5

$

1,242.9

    

Three months ended September 30, 

 

    

Six months ended September 30, 

 

2024

2023

 

2024

2023

 

    

$’s

    

% of sales

    

$’s

    

% of sales

 

$’s

    

% of sales

    

$’s

    

% of sales

 

Gross profit:

Climate Solutions

$

106.3

29.0

%  

$

76.9

 

26.6

%

$

207.1

28.6

%  

$

152.7

 

26.5

%

Performance Technologies

 

60.1

20.2

%  

 

57.6

 

17.1

%

 

123.6

20.4

%  

 

109.5

 

16.1

%

Segment total

 

166.4

25.1

%  

 

134.5

 

21.5

%

 

330.7

24.9

%  

 

262.2

 

20.9

%

Corporate and eliminations

 

(0.8)

 

0.6

 

 

(2.5)

 

0.8

 

Gross profit

$

165.6

25.2

%  

$

135.1

 

21.8

%

$

328.2

24.9

%  

$

263.0

 

21.2

%

    

Three months ended September 30, 

    

Six months ended September 30, 

    

2024

    

2023

 

2024

    

2023

Operating income:

  

  

  

  

Climate Solutions

$

64.7

$

47.1

$

124.5

$

95.7

Performance Technologies

 

30.8

 

31.2

 

62.3

 

58.8

Segment total

 

95.5

 

78.3

 

186.8

 

154.5

Corporate and eliminations

 

(20.2)

 

(12.6)

 

(37.1)

 

(22.3)

Operating income

$

75.3

$

65.7

$

149.7

$

132.2

7


Modine Manufacturing Company

Adjusted financial results (unaudited)

(In millions, except per share amounts)

    

Three months ended September 30, 

    

Six months ended September 30, 

    

2024

    

2023

 

2024

    

2023

Net earnings

$

46.4

$

46.9

$

94.2

$

92.2

Interest expense

 

7.4

 

6.1

 

14.9

 

12.0

Provision for income taxes

 

20.0

 

12.8

 

38.8

 

27.5

Depreciation and amortization expense

 

20.0

 

14.0

 

39.1

 

27.7

Other expense (income) – net

 

1.5

 

(0.1)

 

1.8

 

0.5

Restructuring expenses (a)

 

4.5

 

0.5

 

9.9

 

0.5

Acquisition and integration costs (b)

 

 

 

1.9

 

Environmental charges (c)

 

 

1.0

 

0.1

 

1.2

Adjusted EBITDA

$

99.8

$

81.2

$

200.7

$

161.6

Net earnings per share attributable to Modine shareholders - diluted

$

0.86

$

0.87

$

1.73

$

1.72

Restructuring expenses (a)

 

0.07

 

0.01

 

0.17

 

0.01

Acquisition and integration costs (b)

0.04

0.11

Environmental charges (c)

 

 

0.01

 

 

0.01

Adjusted earnings per share

$

0.97

$

0.89

$

2.01

$

1.74

____

(a)Restructuring expenses primarily consist of employee severance expenses in Europe within the Performance Technologies segment and equipment transfer costs. The tax benefit related to restructuring expenses during the second quarter of fiscal 2025 and fiscal 2024 was $0.4 million and $0.1 million, respectively. The tax benefit related to restructuring expenses during the first six months of fiscal 2025 and fiscal 2024 was $0.8 million and $0.1 million, respectively.

(b)On March 1, 2024, the Company acquired Scott Springfield Manufacturing, a leading provider of air handling units for the data center, telecommunications, healthcare, and aerospace markets. The adjustment in fiscal 2025 includes $1.6 million recorded at Corporate for the impact of an inventory purchase accounting adjustment. The Company wrote up acquired inventory to its estimated fair value and charged the write-up to cost of sales as the underlying inventory was sold. The fiscal 2025 costs also include fees for accounting and legal professional services and incremental costs directly associated with integration activities. In addition, for purposes of calculating adjusted EPS, the Company also adjusted for $5.3 million of incremental amortization expense recorded in the Climate Solutions segment during the first six months of fiscal 2025 associated with an acquired order backlog intangible asset, which will be substantially amortized by the end of fiscal 2025. The tax benefit related to the acquisition related costs and adjustments for the second quarter and first six months of fiscal 2025 was $0.6 million and $1.6 million, respectively.

(c)Environmental charges, including related legal costs, are recorded as SG&A expenses at Corporate and relate to previously-owned facilities.

8


Modine Manufacturing Company

Segment adjusted financial results (unaudited)

(In millions)

    

Three months ended September 30, 2024

    

Three months ended September 30, 2023

 

    

Climate 

    

Performance 

    

Corporate and 

    

    

    

Climate 

    

Performance 

    

Corporate and 

    

    

 

Solutions

Technologies

eliminations

Total

Solutions

Technologies

eliminations

Total

 

Operating income

$

64.7

$

30.8

$

(20.2)

$

75.3

$

47.1

$

31.2

$

(12.6)

$

65.7

Depreciation and amortization expense

 

12.6

 

7.2

 

0.2

 

20.0

 

6.2

 

7.5

 

0.3

 

14.0

Restructuring expenses (a)

 

1.5

 

3.0

 

 

4.5

 

0.3

 

0.2

 

 

0.5

Environmental charges (a)

 

 

 

 

 

 

 

1.0

 

1.0

Adjusted EBITDA

$

78.8

$

41.0

$

(20.0)

$

99.8

$

53.6

$

38.9

$

(11.3)

$

81.2

Net sales

$

366.4

$

297.5

$

(5.9)

$

658.0

$

289.2

$

337.3

$

(6.0)

$

620.5

Adjusted EBITDA margin

 

21.5

%  

 

13.8

%  

 

 

15.2

%  

 

18.5

%  

 

11.5

%  

 

  

 

13.1

%  

    

Six months ended September 30, 2024

    

Six months ended September 30, 2023

 

    

Climate 

    

Performance 

    

Corporate and 

    

    

    

Climate 

    

Performance 

    

Corporate and 

    

    

 

Solutions

Technologies

eliminations

Total

Solutions

Technologies

eliminations

Total

 

Operating income

$

124.5

$

62.3

$

(37.1)

$

149.7

$

95.7

$

58.8

$

(22.3)

$

132.2

Depreciation and amortization expense

 

24.5

 

14.2

 

0.4

 

39.1

 

12.3

 

14.9

 

0.5

 

27.7

Restructuring expenses (a)

 

1.7

 

8.2

 

 

9.9

 

0.3

 

0.2

 

 

0.5

Acquisition and integration costs (a)

 

 

 

1.9

 

1.9

 

 

 

 

Environmental charges (a)

 

 

 

0.1

 

0.1

 

 

 

1.2

 

1.2

Adjusted EBITDA

$

150.7

$

84.7

$

(34.7)

$

200.7

$

108.3

$

73.9

$

(20.6)

$

161.6

Net sales

$

723.7

$

606.5

$

(10.7)

$

1,319.5

$

575.9

$

680.4

$

(13.4)

$

1,242.9

Adjusted EBITDA margin

 

20.8

%  

 

14.0

%  

 

 

15.2

%  

 

18.8

%  

 

10.9

%  

 

  

 

13.0

%  

____

(a)See the Adjusted EBITDA reconciliation on the previous page for information on restructuring expenses and other adjustments.

9


Modine Manufacturing Company

Net debt (unaudited)

(In millions)

    

September 30, 2024

    

March 31, 2024

Debt due within one year

$

46.3

$

31.7

Long-term debt

 

359.1

 

399.9

Total debt

 

405.4

 

431.6

Less: cash and cash equivalents

 

78.6

 

60.1

Net debt

$

326.8

$

371.5

Free cash flow (unaudited)

(In millions)

 

Three months ended September 30, 

    

Six months ended September 30, 

    

2024

    

2023

2024

    

2023

Net cash provided by operating activities

$

57.3

$

69.1

$

97.8

$

110.8

Expenditures for property, plant and equipment

 

(13.5)

 

(11.1)

 

(40.3)

 

(26.2)

Free cash flow

$

43.8

$

58.0

$

57.5

$

84.6

Organic sales and organic sales growth (unaudited)

(In millions)

    

Three months ended September 30, 2024

    

Three months ended September 30, 2023

 

    

    

Effect of

    

    

    

    

    

Sales

    

Organic

External

Exchange Rate

Effect of

Organic

External

Effect of

Excluding

Sales

Sales

Changes

Acquisitions

Sales

Sales

Dispositions

Dispositions

Growth

Net sales:

  

  

  

  

  

  

  

  

 

Climate Solutions

$

366.4

$

(2.4)

$

(53.4)

$

310.6

$

289.2

$

$

289.2

7

%

Performance Technologies

 

291.6

 

2.6

 

 

294.2

 

331.3

 

(21.9)

 

309.4

(5)

%

Net Sales

$

658.0

$

0.2

$

(53.4)

$

604.8

$

620.5

$

(21.9)

$

598.6

1

%

    

Six months ended September 30, 2024

    

Six months ended September 30, 2023

 

    

    

Effect of

    

    

    

    

    

Sales

    

Organic

External

Exchange Rate

Effect of

Organic

External

Effect of

Excluding

Sales

Sales

Changes

Acquisitions

Sales

Sales

Dispositions

Dispositions

Growth

Net sales:

  

  

  

  

  

  

  

  

 

Climate Solutions

$

723.6

$

(1.7)

$

(94.5)

$

627.4

$

575.9

$

$

575.9

9

%

Performance Technologies

 

595.9

 

6.0

 

 

601.9

 

667.0

 

(46.2)

 

620.8

(3)

%

Net Sales

$

1,319.5

$

4.3

$

(94.5)

$

1,229.3

$

1,242.9

$

(46.2)

$

1,196.7

3

%

10


SOURCE: Modine

Kathleen Powers

(262) 636-1687

kathleen.t.powers@modine.com

11


v3.24.3
Document and Entity Information
Oct. 29, 2024
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Oct. 29, 2024
Entity File Number 001-01373
Entity Registrant Name Modine Manufacturing Company
Entity Central Index Key 0000067347
Entity Incorporation, State or Country Code WI
Entity Tax Identification Number 39-0482000
Entity Address, Address Line One 1500 DeKoven Avenue
Entity Address, City or Town Racine
Entity Address, State or Province WI
Entity Address, Postal Zip Code 53403
City Area Code 262
Local Phone Number 636-1200
Title of 12(b) Security Common Stock, $0.625 par value
Trading Symbol MOD
Security Exchange Name NYSE
Entity Emerging Growth Company false
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false

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