Data center growth and benefits from 80/20
initiatives drove strong second quarter results, leading to second
consecutive upward revision to full-year earnings outlook
RACINE,
Wis., Nov. 1, 2023 /PRNewswire/ -- Modine (NYSE:
MOD), a diversified global leader in thermal management technology
and solutions, today reported financial results for the quarter
ended September 30, 2023.
Second Quarter Highlights:
- Net sales of $620.5 million
increased 7 percent from the prior year
- Operating income of $65.7 million
increased $28.9 million, or 79
percent, from the prior year
- Adjusted EBITDA of $81.2 million
increased $30.1 million, or 59
percent, from the prior year
- Earnings per share of $0.87
compared to $0.46 in the prior
year
- Adjusted earnings per share of $0.89 compared to $0.48 in the prior year
Revised Fiscal 2024 Outlook:
- Net sales up 6 percent to 11 percent
- Adjusted EBITDA of $285 million
to $300 million, an increase of 34
percent to 41 percent over the prior year
"Our second quarter results were once again ahead of our
expectations, with strong revenue growth driven by data center
sales, benefits from 80/20 initiatives, and favorable currency
impacts," said Modine President and
Chief Executive Officer, Neil D.
Brinker. "Our data center sales more than doubled compared
to the prior year for the second consecutive quarter, supported by
strong demand from both hyperscale and colocation customers.
We also are pleased with the progress being made by the Performance
Technologies segment, where 80/20 actions are yielding significant
early benefits. These improvements are resulting in significant
increases in gross margin and adjusted EBITDA margin, which grew by
520 basis points and 430 basis points, respectively."
Financial Results
Net sales increased 7 percent in the second quarter to
$620.5 million, compared with
$578.8 million in the prior year. On
a constant currency basis, sales increased 5 percent. The increase
was driven by improvements in both the Climate Solutions and
Performance Technologies segments.
Gross profit increased 40 percent in the second quarter to
$135.1 million and gross margin
improved by 520 basis points to 21.8 percent, primarily due to the
favorable impact of higher sales.
Selling, general and administrative ("SG&A") expenses
increased $10.1 million to
$68.9 million in the second quarter.
This increase was primarily driven by higher compensation-related
expenses, including higher incentive compensation driven by
improved financial results, higher product development costs, and
higher professional fees.
Operating income in the second quarter was $65.7 million, compared to $36.8 million in the prior year. The increase was
driven by higher gross profit as compared to the prior year. During
the second quarter of fiscal 2024, the Company recorded
$0.5 million of restructuring
expenses and $1.0 million of
environmental charges. During the second quarter of fiscal 2023,
the Company recorded $0.6 million of
restructuring expenses and $0.3
million of environmental charges. Adjusted EBITDA, which
excludes restructuring expenses, environmental charges, and
depreciation and amortization expense, was $81.2 million, an increase of $30.1 million, or 59 percent, compared with
$51.1 million in the prior
year.
Earnings per share was $0.87 in the second quarter, compared with
$0.46 in the second quarter of the
prior year. Adjusted earnings per share was $0.89 in the second quarter, compared with
adjusted earnings per share of $0.48
in the second quarter of the prior year. These improvements were
primarily driven by higher gross profit on higher sales.
Second Quarter Segment Review
- Climate Solutions segment sales were $275.8 million, compared with $255.9 million one year ago, an increase of 8
percent. On a constant currency basis, sales increased 5 percent
from the prior year. This increase was driven by higher sales of
data center cooling products, partially offset by lower sales of
heat transfer products and HVAC and refrigeration products. The
segment reported gross margin of 26.0 percent, which was 360 basis
points higher than the prior year, primarily due to higher sales
volume. The segment reported operating income of $44.6 million, a 36 percent increase from the
prior year. Adjusted EBITDA was $50.4
million, an increase of $12.0
million, or 31 percent, from the prior year.
- Performance Technologies segment sales were $351.7 million, compared with $330.0 million one year ago, an increase of 7
percent. On a constant currency basis, sales increased 4 percent
from the prior year. This increase primarily resulted from higher
sales of advanced solutions, liquid-cooled, and air-cooled
products, primarily driven by higher sales to off-highway,
commercial vehicle, and specialty vehicle customers. The segment
reported gross margin of 17.8 percent, up 590 basis points from the
prior year. The segment reported operating income of $33.6 million, a $17.3
million improvement compared to the prior year, primarily
due to higher gross profit. Adjusted EBITDA was $42.0 million, an increase of $17.7 million, or 73 percent, from the prior
year.
Balance Sheet & Liquidity
Net cash provided by operating activities for the six months
ended September 30, 2023, was
$110.8 million, an increase of
$54.7 million compared to the prior
year. Free cash flow for the six months ended September 30, 2023, was $84.6 million, an increase of $51.5 million from the prior year. This increase
was primarily due to the favorable impact of higher earnings,
partially offset by unfavorable net changes in working capital as
compared with the prior year. Cash payments for restructuring
activities, environmental costs, and certain other items during the
six months ended September 30, 2023,
totaled $7.6 million.
Total debt was $342.6 million as
of September 30, 2023. Cash and cash
equivalents on September 30, 2023,
were $120.2 million. Net debt was
$222.4 million as of September 30, 2023, a decrease of $63.2 million from the end of fiscal 2023.
Outlook
"Our second quarter performance was stronger than expected, so
we are once again raising our full-year earnings guidance," added
Brinker. "Volumes in our data center business have exceeded our
expectations, but we are maintaining a cautious outlook based on
current economic conditions and trends in our other end
markets. As a result, we are confirming our second half
top-line outlook, and remain confident in our ability to achieve
our near-term profitability goals. Looking longer-term, our
business transformation remains in its early stages and we are
either on track or ahead of schedule as we work toward our
financial goals."
Based on current exchange rates and market outlook, Modine
provides its revised outlook for fiscal 2024:
Fiscal
2024
|
Current
Outlook
|
Net
Sales
|
+6 percent to 11
percent
|
Adjusted
EBITDA
|
$285 to $300
million
|
Conference Call and Webcast
Modine will conduct a conference call and live webcast, with a
slide presentation, on Thursday, November 2,
2023 at 10:00 a.m. Central
Time (11:00 a.m. Eastern Time)
to discuss its second quarter fiscal year 2024 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
November 2, 2023. An audio only
replay will be available through midnight on November 9, 2023 at 877-660-6853, (international
replay 201-612-7415); Conference ID# 13741055. The Company will
post a transcript of the call on its website on or after
November 7, 2023.
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,
2023 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,
2023. 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, 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, increases in
interest rates or 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, COVID-19
or future public health threats, and military conflicts, including
the current conflicts in Ukraine
and in the Middle East; the
overall health and pricing focus of our customers, including
impacts associated with the recent United Auto Workers union
strikes; 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 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 systems; 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.
Non-GAAP Financial Disclosures
Adjusted EBITDA, adjusted EBITDA margin, adjusted earnings per
share, net debt, free cash flow, and constant currency (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, impairment charges 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 GAAP operating
income excluding depreciation and amortization expenses,
restructuring expenses, impairment charges, and certain other gains
or charges.
Definition – Adjusted earnings per share
Diluted earnings per share plus restructuring expenses,
impairment charges, 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 non-cash
impairment charges, costs associated with restructuring activities
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 – Constant currency
Constant currency translates financial data from foreign
operations for a period into U.S. dollars using the same foreign
currency exchange rates as those used to translate financial data
for the prior period. This measure provides a more consistent
indication of our performance, without the effects of foreign
currency exchange rate fluctuations.
Forward-looking non-GAAP financial measure
The Company's fiscal 2024 guidance includes adjusted EBITDA, as
defined above, which is a non-GAAP financial measure. The full-year
fiscal 2024 guidance for adjusted EBITDA is based upon the
Company's estimates for interest expense of approximately
$23 to $25
million, a provision for income taxes of approximately
$49 to $55
million, and depreciation and amortization expense of
approximately $56 to $60 million. Adjusted EBITDA also excludes
certain cash and non-cash expenses or gains. These expenses and
gains may be significant and include items such as restructuring
expenses (including severance costs and plant consolidation and
relocation expenses), impairment charges and certain other items.
These expenses for the first six months of fiscal 2024 are
presented on page 9. Estimates of these expenses and gains for the
remainder of fiscal 2024 are not available due to the low
visibility and unpredictability of these items.
Modine Manufacturing
Company
|
|
|
|
|
|
|
|
Consolidated
statements of operations (unaudited)
|
|
|
|
|
|
|
|
(In millions, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Six months ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
$
620.5
|
|
$
578.8
|
|
$
1,242.9
|
|
$
1,119.8
|
Cost of
sales
|
485.4
|
|
482.6
|
|
979.9
|
|
940.2
|
Gross
profit
|
135.1
|
|
96.2
|
|
263.0
|
|
179.6
|
Selling, general &
administrative expenses
|
68.9
|
|
58.8
|
|
130.3
|
|
115.1
|
Restructuring
expenses
|
0.5
|
|
0.6
|
|
0.5
|
|
2.1
|
Operating
income
|
65.7
|
|
36.8
|
|
132.2
|
|
62.4
|
Interest
expense
|
(6.1)
|
|
(4.7)
|
|
(12.0)
|
|
(8.8)
|
Other income (expense)
– net
|
0.1
|
|
(1.4)
|
|
(0.5)
|
|
(3.7)
|
Earnings before
income taxes
|
59.7
|
|
30.7
|
|
119.7
|
|
49.9
|
Provision for income
taxes
|
(12.8)
|
|
(6.4)
|
|
(27.5)
|
|
(11.3)
|
Net
earnings
|
46.9
|
|
24.3
|
|
92.2
|
|
38.6
|
Net (earnings) loss
attributable to noncontrolling interest
|
(0.4)
|
|
0.1
|
|
(0.9)
|
|
0.1
|
Net earnings
attributable to Modine
|
$
46.5
|
|
$
24.4
|
|
$
91.3
|
|
$
38.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share
attributable to Modine shareholders – diluted
|
$
0.87
|
|
$
0.46
|
|
$
1.72
|
|
$
0.74
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding – diluted
|
53.4
|
|
52.7
|
|
53.2
|
|
52.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
consolidated balance sheets (unaudited)
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
September 30,
2023
|
|
March 31,
2023
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
120.2
|
|
$
67.1
|
|
|
|
|
Trade
receivables
|
377.0
|
|
398.0
|
|
|
|
|
Inventories
|
321.5
|
|
324.9
|
|
|
|
|
Assets held for
sale
|
18.4
|
|
-
|
|
|
|
|
Other current
assets
|
60.9
|
|
56.4
|
|
|
|
|
Total current
assets
|
898.0
|
|
846.4
|
|
|
|
|
Property, plant and
equipment – net
|
303.8
|
|
314.5
|
|
|
|
|
Intangible assets –
net
|
79.3
|
|
81.1
|
|
|
|
|
Goodwill
|
164.3
|
|
165.6
|
|
|
|
|
Deferred income
taxes
|
77.6
|
|
83.7
|
|
|
|
|
Other noncurrent
assets
|
82.1
|
|
74.6
|
|
|
|
|
Total
assets
|
$
1,605.1
|
|
$
1,565.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
Debt due within one
year
|
$
19.7
|
|
$
23.4
|
|
|
|
|
Accounts
payable
|
274.9
|
|
332.8
|
|
|
|
|
Liabilities held for
sale
|
21.1
|
|
-
|
|
|
|
|
Other current
liabilities
|
177.4
|
|
150.9
|
|
|
|
|
Total current
liabilities
|
493.1
|
|
507.1
|
|
|
|
|
Long-term
debt
|
322.9
|
|
329.3
|
|
|
|
|
Other noncurrent
liabilities
|
115.1
|
|
129.9
|
|
|
|
|
Total
liabilities
|
931.1
|
|
966.3
|
|
|
|
|
Total equity
|
674.0
|
|
599.6
|
|
|
|
|
Total liabilities
& equity
|
$
1,605.1
|
|
$
1,565.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modine Manufacturing
Company
|
|
|
|
|
|
|
|
Condensed
consolidated statements of cash flows (unaudited)
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
September 30,
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net earnings
|
$
92.2
|
|
$
38.6
|
|
|
|
|
Adjustments to
reconcile net earnings to net cash provided by
|
|
|
|
|
|
|
|
operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
27.7
|
|
27.3
|
|
|
|
|
Stock-based
compensation expense
|
4.6
|
|
3.5
|
|
|
|
|
Deferred income
taxes
|
5.5
|
|
(0.5)
|
|
|
|
|
Other –
net
|
3.8
|
|
1.8
|
|
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Trade accounts
receivable
|
6.7
|
|
0.2
|
|
|
|
|
Inventories
|
(4.3)
|
|
(30.5)
|
|
|
|
|
Accounts
payable
|
(43.3)
|
|
7.2
|
|
|
|
|
Other assets and
liabilities
|
17.9
|
|
8.5
|
|
|
|
|
Net cash provided by
operating activities
|
110.8
|
|
56.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Expenditures for
property, plant and equipment
|
(26.2)
|
|
(23.0)
|
|
|
|
|
Payments for business
acquisition
|
(4.8)
|
|
-
|
|
|
|
|
Proceeds from
disposition of assets
|
1.1
|
|
0.1
|
|
|
|
|
Other – net
|
(4.5)
|
|
-
|
|
|
|
|
Net cash used for
investing activities
|
(34.4)
|
|
(22.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Net (decrease) increase
in debt
|
(9.5)
|
|
0.4
|
|
|
|
|
Purchase of treasury
stock under share repurchase program
|
(9.0)
|
|
(2.6)
|
|
|
|
|
Other –
net
|
(0.1)
|
|
(0.3)
|
|
|
|
|
Net cash used for
financing activities
|
(18.6)
|
|
(2.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash
|
(1.9)
|
|
(5.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in
cash, cash equivalents, restricted cash and cash held for
sale
|
55.9
|
|
24.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents,
restricted cash and cash held for sale - beginning of
period
|
67.2
|
|
45.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents, restricted cash and cash held for sale - end of
period
|
$
123.1
|
|
$
70.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modine Manufacturing
Company
|
|
|
|
|
|
|
|
Segment operating
results (unaudited)
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Six months ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales:
|
|
|
|
|
|
|
|
Climate
Solutions
|
$
275.8
|
|
$
255.9
|
|
$
547.6
|
|
$
500.3
|
Performance
Technologies
|
351.7
|
|
330.0
|
|
710.6
|
|
634.3
|
Segment
total
|
627.5
|
|
585.9
|
|
1,258.2
|
|
1,134.6
|
Corporate and
eliminations
|
(7.0)
|
|
(7.1)
|
|
(15.3)
|
|
(14.8)
|
Net
sales
|
$
620.5
|
|
$
578.8
|
|
$
1,242.9
|
|
$
1,119.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Six months ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Gross
profit:
|
|
$'s
|
% of
sales
|
|
$'s
|
% of
sales
|
|
$'s
|
% of
sales
|
|
$'s
|
% of
sales
|
Climate
Solutions
|
|
$
71.8
|
26.0 %
|
|
$
57.3
|
22.4 %
|
|
$
140.8
|
25.7 %
|
|
$
107.7
|
21.5 %
|
Performance
Technologies
|
|
62.8
|
17.8 %
|
|
39.2
|
11.9 %
|
|
121.4
|
17.1 %
|
|
72.2
|
11.4 %
|
Segment
total
|
|
134.6
|
21.4 %
|
|
96.5
|
16.5 %
|
|
262.2
|
20.8 %
|
|
179.9
|
15.9 %
|
Corporate and
eliminations
|
|
0.5
|
-
|
|
(0.3)
|
-
|
|
0.8
|
-
|
|
(0.3)
|
-
|
Gross
profit
|
|
$
135.1
|
21.8 %
|
|
$
96.2
|
16.6 %
|
|
$
263.0
|
21.2 %
|
|
$
179.6
|
16.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Six months ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Operating
income:
|
|
|
|
|
|
|
|
|
Climate
Solutions
|
|
$
44.6
|
|
$
32.7
|
|
$
88.9
|
|
$
59.7
|
Performance
Technologies
|
|
33.6
|
|
16.3
|
|
65.6
|
|
23.7
|
Segment
total
|
|
78.2
|
|
49.0
|
|
154.5
|
|
83.4
|
Corporate and
eliminations
|
|
(12.5)
|
|
(12.2)
|
|
(22.3)
|
|
(21.0)
|
Operating
income
|
|
$
65.7
|
|
$
36.8
|
|
$
132.2
|
|
$
62.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modine Manufacturing
Company
|
|
|
|
|
|
|
|
Adjusted financial
results (unaudited)
|
|
|
|
|
|
|
|
(In millions, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Six months ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net earnings
|
$
46.9
|
|
$
24.3
|
|
$
92.2
|
|
$
38.6
|
Interest
expense
|
6.1
|
|
4.7
|
|
12.0
|
|
8.8
|
Provision for income
taxes
|
12.8
|
|
6.4
|
|
27.5
|
|
11.3
|
Depreciation and
amortization expense
|
14.0
|
|
13.4
|
|
27.7
|
|
27.3
|
Other (income) expense
– net
|
(0.1)
|
|
1.4
|
|
0.5
|
|
3.7
|
Restructuring expenses
(a)
|
0.5
|
|
0.6
|
|
0.5
|
|
2.1
|
Environmental charges
(b)
|
1.0
|
|
0.3
|
|
1.2
|
|
1.4
|
Adjusted
EBITDA
|
$
81.2
|
|
$
51.1
|
|
$
161.6
|
|
$
93.2
|
|
|
|
|
|
|
|
|
Net earnings per share
attributable to Modine shareholders - diluted
|
$
0.87
|
|
$
0.46
|
|
$
1.72
|
|
$
0.74
|
Restructuring expenses
(a)
|
0.01
|
|
0.01
|
|
0.01
|
|
0.03
|
Environmental charges
(b)
|
0.01
|
|
0.01
|
|
0.01
|
|
0.03
|
Adjusted earnings
per share
|
$
0.89
|
|
$
0.48
|
|
$
1.74
|
|
$
0.80
|
|
|
|
|
|
|
|
|
(a)
Restructuring expenses primarily consist of employee severance
expenses related to targeted headcount reductions and equipment
transfer costs. The tax benefit related to
restructuring expenses during the first six
months of fiscal 2024 and fiscal 2023 was $0.1 million and $0.2
million, respectively.
|
(b) Environmental charges, including related legal costs,
are recorded as SG&A expenses at Corporate and relate to a
previously-owned U.S. manufacturing facility.
|
Modine Manufacturing
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment adjusted
financial results (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2023
|
|
Three months ended
September 30, 2022
|
|
Climate
Solutions
|
|
Performance
Technologies
|
|
Corporate and
eliminations
|
|
Total
|
|
Climate
Solutions
|
|
Performance
Technologies
|
|
Corporate and
eliminations
|
|
Total
|
Operating
income
|
$
44.6
|
|
$
33.6
|
|
$
(12.5)
|
|
$
65.7
|
|
$ 32.7
|
|
$
16.3
|
|
$
(12.2)
|
|
$
36.8
|
Depreciation and
amortization expense
|
5.5
|
|
8.2
|
|
0.3
|
|
14.0
|
|
5.4
|
|
7.7
|
|
0.3
|
|
13.4
|
Restructuring expenses
(a)
|
0.3
|
|
0.2
|
|
-
|
|
0.5
|
|
0.3
|
|
0.3
|
|
-
|
|
0.6
|
Environmental charges
(a)
|
-
|
|
-
|
|
1.0
|
|
1.0
|
|
-
|
|
-
|
|
0.3
|
|
0.3
|
Adjusted
EBITDA
|
$
50.4
|
|
$
42.0
|
|
$
(11.2)
|
|
$
81.2
|
|
$ 38.4
|
|
$
24.3
|
|
$
(11.6)
|
|
$
51.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$ 275.8
|
|
$
351.7
|
|
$
(7.0)
|
|
$ 620.5
|
|
$
255.9
|
|
$
330.0
|
|
$
(7.1)
|
|
$
578.8
|
Adjusted EBITDA
margin
|
18.3 %
|
|
11.9 %
|
|
|
|
13.1 %
|
|
15.0 %
|
|
7.4 %
|
|
|
|
8.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
September 30, 2023
|
|
Six months ended
September 30, 2022
|
|
Climate
Solutions
|
|
Performance
Technologies
|
|
Corporate and
eliminations
|
|
Total
|
|
Climate
Solutions
|
|
Performance
Technologies
|
|
Corporate and
eliminations
|
|
Total
|
Operating
income
|
$
88.9
|
|
$
65.6
|
|
$
(22.3)
|
|
$ 132.2
|
|
$ 59.7
|
|
$
23.7
|
|
$
(21.0)
|
|
$
62.4
|
Depreciation and
amortization expense
|
10.9
|
|
16.3
|
|
0.5
|
|
27.7
|
|
10.8
|
|
15.9
|
|
0.6
|
|
27.3
|
Restructuring expenses
(a)
|
0.3
|
|
0.2
|
|
-
|
|
0.5
|
|
0.3
|
|
1.8
|
|
-
|
|
2.1
|
Environmental charges
(a)
|
-
|
|
-
|
|
1.2
|
|
1.2
|
|
-
|
|
-
|
|
1.4
|
|
1.4
|
Adjusted
EBITDA
|
$ 100.1
|
|
$
82.1
|
|
$
(20.6)
|
|
$ 161.6
|
|
$ 70.8
|
|
$
41.4
|
|
$
(19.0)
|
|
$
93.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$ 547.6
|
|
$
710.6
|
|
$
(15.3)
|
|
$
1,242.9
|
|
$
500.3
|
|
$
634.3
|
|
$
(14.8)
|
|
$
1,119.8
|
Adjusted EBITDA
margin
|
18.3 %
|
|
11.6 %
|
|
|
|
13.0 %
|
|
14.2 %
|
|
6.5 %
|
|
|
|
8.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
See the Adjusted EBITDA reconciliation
above for information on restructuring expenses and other
adjustments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modine Manufacturing
Company
|
|
|
|
|
|
|
|
Net debt
(unaudited)
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2023
|
|
March 31,
2023
|
|
|
|
|
Debt due within one
year
|
$
19.7
|
|
$
23.4
|
|
|
|
|
Long-term
debt
|
322.9
|
|
329.3
|
|
|
|
|
Total debt
|
342.6
|
|
352.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: cash and cash
equivalents
|
120.2
|
|
67.1
|
|
|
|
|
Net
debt
|
$
222.4
|
|
$
285.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
(unaudited)
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Six months ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash provided by
operating activities
|
$
69.1
|
|
$
41.6
|
|
$
110.8
|
|
$
56.1
|
Expenditures for
property, plant and equipment
|
(11.1)
|
|
(12.6)
|
|
(26.2)
|
|
(23.0)
|
Free cash
flow
|
$
58.0
|
|
$
29.0
|
|
$
84.6
|
|
$
33.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales - constant
currency (unaudited)
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
2023
|
|
2022
|
|
Net Sales
|
|
Effect of Exchange
Rate
Changes
|
|
Net Sales -
Constant Currency
|
|
Net Sales
|
Climate
Solutions
|
$
275.8
|
|
$
(6.6)
|
|
$
269.2
|
|
$
255.9
|
Performance
Technologies
|
351.7
|
|
(8.0)
|
|
343.7
|
|
330.0
|
Segment
total
|
627.5
|
|
(14.6)
|
|
612.9
|
|
585.9
|
Corporate and
eliminations
|
(7.0)
|
|
(0.1)
|
|
(7.1)
|
|
(7.1)
|
Net
sales
|
$
620.5
|
|
$
(14.7)
|
|
$
605.8
|
|
$
578.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen Powers
(262) 636-1687
kathleen.t.powers@modine.com
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SOURCE Modine