Growth in target markets and 80/20
improvements resulted in strong third quarter results, leading to
third consecutive upward revision to full-year earnings
outlook
RACINE,
Wis., Jan. 30, 2024 /PRNewswire/ -- Modine
(NYSE: MOD), a diversified global leader in thermal management
technology and solutions, today reported financial results for the
quarter ended December 31, 2023.
Third Quarter Highlights:
- Net sales of $561.4 million, in
line with the prior year including divestiture impact
- Operating income of $61.7 million
increased $22.2 million, or 56
percent, from the prior year
- Adjusted EBITDA of $73.9 million
increased $20.6 million, or 39
percent, from the prior year
- Earnings per share of $0.83
compared to $0.46 in the prior
year
- Adjusted earnings per share of $0.74 compared to $0.48 in the prior year
Revised Full-Year Fiscal 2024 Outlook:
- Net sales up 4 percent to 7 percent
- Adjusted EBITDA of $305 million
to $313 million, resulting in an
increase of 44 percent to 48 percent over the prior year
"Our strong third quarter earnings growth demonstrates the
ongoing power of our cultural transformation and 80/20
initiatives," said Modine President
and Chief Executive Officer, Neil D.
Brinker. "We are experiencing rapid sales growth to the data
center market, supported by robust demand from both hyperscale and
colocation customers. We also are pleased with the progress in
Performance Technologies, where 80/20 actions are generating
significant benefits. The targeted growth and 80/20 improvements
are resulting in substantial margin increases, with adjusted EBITDA
margin up 370 basis points in the quarter."
Financial Results
Net sales of $561.4 million in the
third quarter were essentially flat compared to $560.0 million in the prior year. Sales in the
Performance Technologies segment increased slightly while the
Climate Solutions segment saw a mild decline.
Gross profit increased 30 percent in the third quarter to
$127.3 million and gross margin
improved by 530 basis points to 22.7 percent, primarily due to
ongoing 80/20 initiatives and higher average selling prices.
Selling, general and administrative ("SG&A") expenses
increased $10.0 million to
$68.0 million in the third quarter.
This increase was primarily driven by higher compensation-related
expenses, including higher incentive compensation driven by
improved financial results.
Operating income in the third quarter was $61.7 million, compared to $39.5 million in the prior year. The increase was
driven by higher gross profit as compared to the prior year. During
the third quarter of fiscal 2024, the Company recorded a
$4.0 million gain on the sale of
German automotive businesses, $1.6
million of restructuring expenses and $1.2 million of environmental charges. During the
third quarter of fiscal 2023, the Company recorded $0.1 million of restructuring expenses and
$0.3 million of environmental
charges. Adjusted EBITDA, which excludes the gain on sale,
restructuring expenses, environmental charges, and depreciation and
amortization expense, was $73.9
million, an increase of $20.6
million, or 39 percent, compared with $53.3 million in the prior year.
Earnings per share was $0.83 in the third quarter, compared with
$0.46 in the third quarter of the
prior year. Adjusted earnings per share was $0.74 in the third quarter, compared with
adjusted earnings per share of $0.48
in the third quarter of the prior year. These improvements were
primarily driven by higher gross profit.
Third Quarter Segment Review
- Climate Solutions segment sales were $242.5 million, compared with $248.6 million one year ago, a decrease of 2
percent. This decrease was driven by lower sales of heat transfer
products, partially offset by higher sales of data center cooling
products and HVAC and refrigeration products. The segment reported
gross margin of 27.3 percent, which was 530 basis points higher
than the prior year, primarily due to an improved sales mix and
improved operating efficiencies. The segment reported operating
income of $38.8 million, a 28 percent
increase from the prior year. Adjusted EBITDA was $45.8 million, an increase of $10.4 million, or 29 percent, from the prior
year.
- Performance Technologies segment sales were $323.0 million, compared with $317.8 million one year ago, an increase of 2
percent. This increase resulted from higher sales of advanced
solutions and air-cooled products, primarily driven by higher sales
to off-highway and specialty vehicle customers, partially offset by
the impact of divested businesses in the quarter. The segment
reported gross margin of 18.9 percent, up 540 basis points from the
prior year. The segment reported operating income of $31.2 million, a $13.8
million improvement compared to the prior year, primarily
due to higher gross profit. Adjusted EBITDA was $38.9 million, an increase of $13.3 million, or 52 percent, from the prior
year.
Balance Sheet & Liquidity
Net cash provided by operating activities for the nine months
ended December 31, 2023, was
$175.0 million, an increase of
$107.1 million compared to the prior
year. Free cash flow for the nine months ended December 31, 2023, was $131.2 million, an increase of $98.5 million from the prior year. This increase
was primarily due to the favorable impact of higher earnings, along
with favorable net changes in working capital as compared with the
prior year. Cash payments for restructuring activities,
environmental costs, and certain other items during the nine months
ended December 31, 2023, totaled
$9.7 million.
Total debt was $333.2 million as
of December 31, 2023. Cash and cash
equivalents on December 31, 2023,
were $149.7 million. Net debt was
$183.5 million as of December 31, 2023, a decrease of $102.1 million from the end of fiscal 2023.
Outlook
"We have adjusted our outlook for net sales to reflect the
recent automotive divestitures in Germany and to reflect the impact of ongoing
market weakness for our heat transfer and heating products," added
Brinker. "However, we are once again raising our full-year earnings
guidance driven by the strong third quarter results and significant
80/20 progress. 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
|
+4 percent to 7
percent
|
Adjusted
EBITDA
|
$305 to $313
million
|
Conference Call and Webcast
Modine will conduct a conference call and live webcast, with a
slide presentation, on Wednesday, January
31, 2024 at 10:00 a.m. Central
Time (11:00 a.m. Eastern Time)
to discuss its third 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
January 31, 2024. An audio only
replay will be available through midnight on February 7, 2024 at 877-660-6853, (international
replay 201-612-7415); Conference ID# 13743053. The Company will
post a transcript of the call on its website on or after
February 5, 2024.
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 quarters ended June 30,
2023 and September 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 and the recent attacks on shipping
vessels in the Red Sea; the overall health and pricing focus of our
customers, including any lingering impacts associated with the now
settled 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 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 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, and free cash flow (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.
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
$22 to $24
million, a provision for income taxes of approximately
$52 to $56
million, and depreciation and amortization expense of
approximately $54 to $56 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 nine months of fiscal 2024 are
presented on page 9. In connection with a restructuring plan
to close a technical service center in Europe during the first half of fiscal 2025,
the Company expects to record closure costs totaling approximately
$8.0 million to $12.0 million. Beyond the severance
expenses associated with this restructuring plan, which are
anticipated to be recorded during the fourth quarter, 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
December 31,
|
|
Nine months ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
$
561.4
|
|
$
560.0
|
|
$
1,804.3
|
|
$
1,679.8
|
Cost of
sales
|
434.1
|
|
462.4
|
|
1,414.0
|
|
1,402.6
|
Gross
profit
|
127.3
|
|
97.6
|
|
390.3
|
|
277.2
|
Selling, general &
administrative expenses
|
68.0
|
|
58.0
|
|
198.3
|
|
173.1
|
Restructuring
expenses
|
1.6
|
|
0.1
|
|
2.1
|
|
2.2
|
Gain on sale of
assets
|
(4.0)
|
|
-
|
|
(4.0)
|
|
-
|
Operating
income
|
61.7
|
|
39.5
|
|
193.9
|
|
101.9
|
Interest
expense
|
(5.8)
|
|
(5.9)
|
|
(17.8)
|
|
(14.7)
|
Other expense –
net
|
(0.5)
|
|
(0.4)
|
|
(1.0)
|
|
(4.1)
|
Earnings before
income taxes
|
55.4
|
|
33.2
|
|
175.1
|
|
83.1
|
Provision for income
taxes
|
(10.3)
|
|
(8.5)
|
|
(37.8)
|
|
(19.8)
|
Net
earnings
|
45.1
|
|
24.7
|
|
137.3
|
|
63.3
|
Net earnings
attributable to noncontrolling interest
|
(0.7)
|
|
(0.2)
|
|
(1.6)
|
|
(0.1)
|
Net earnings
attributable to Modine
|
$
44.4
|
|
$
24.5
|
|
$
135.7
|
|
$
63.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share
attributable to Modine shareholders – diluted
|
$
0.83
|
|
$
0.46
|
|
$
2.55
|
|
$
1.20
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding – diluted
|
53.2
|
|
52.9
|
|
53.2
|
|
52.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
consolidated balance sheets (unaudited)
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
December 31,
2023
|
|
March 31,
2023
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
149.7
|
|
$
67.1
|
|
|
|
|
Trade
receivables
|
364.4
|
|
398.0
|
|
|
|
|
Inventories
|
341.3
|
|
324.9
|
|
|
|
|
Other current
assets
|
62.8
|
|
56.4
|
|
|
|
|
Total current
assets
|
918.2
|
|
846.4
|
|
|
|
|
Property, plant and
equipment – net
|
317.3
|
|
314.5
|
|
|
|
|
Intangible assets –
net
|
78.4
|
|
81.1
|
|
|
|
|
Goodwill
|
166.7
|
|
165.6
|
|
|
|
|
Deferred income
taxes
|
78.1
|
|
83.7
|
|
|
|
|
Other noncurrent
assets
|
92.7
|
|
74.6
|
|
|
|
|
Total
assets
|
$
1,651.4
|
|
$
1,565.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
Debt due within one
year
|
$
19.7
|
|
$
23.4
|
|
|
|
|
Accounts
payable
|
255.3
|
|
332.8
|
|
|
|
|
Other current
liabilities
|
200.5
|
|
150.9
|
|
|
|
|
Total current
liabilities
|
475.5
|
|
507.1
|
|
|
|
|
Long-term
debt
|
313.5
|
|
329.3
|
|
|
|
|
Other noncurrent
liabilities
|
127.2
|
|
129.9
|
|
|
|
|
Total
liabilities
|
916.2
|
|
966.3
|
|
|
|
|
Total equity
|
735.2
|
|
599.6
|
|
|
|
|
Total liabilities
& equity
|
$
1,651.4
|
|
$
1,565.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modine Manufacturing
Company
|
|
|
|
Condensed
consolidated statements of cash flows (unaudited)
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
Nine months ended
December 31,
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
Net earnings
|
$
137.3
|
|
$
63.3
|
Adjustments to
reconcile net earnings to net cash provided by
|
|
|
|
operating
activities:
|
|
|
|
Depreciation and
amortization
|
41.1
|
|
40.7
|
Gain on sale of
assets
|
(4.0)
|
|
-
|
Stock-based
compensation expense
|
7.7
|
|
5.0
|
Deferred income
taxes
|
4.7
|
|
(0.9)
|
Other –
net
|
4.7
|
|
4.0
|
Changes in operating
assets and liabilities:
|
|
|
|
Trade accounts
receivable
|
26.9
|
|
5.4
|
Inventories
|
(18.5)
|
|
(40.0)
|
Accounts
payable
|
(67.8)
|
|
(9.3)
|
Other assets and
liabilities
|
42.9
|
|
(0.3)
|
Net cash provided by
operating activities
|
175.0
|
|
67.9
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Expenditures for
property, plant and equipment
|
(43.8)
|
|
(35.2)
|
Payments for business
acquisition
|
(4.8)
|
|
-
|
Proceeds from (payments
for) disposition of assets
|
(0.6)
|
|
0.1
|
Other – net
|
(5.3)
|
|
(0.1)
|
Net cash used for
investing activities
|
(54.5)
|
|
(35.2)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Net (decrease) increase
in debt
|
(20.7)
|
|
12.0
|
Purchase of treasury
stock under share repurchase program
|
(13.3)
|
|
(4.7)
|
Other –
net
|
(3.4)
|
|
0.1
|
Net cash (used for)
provided by financing activities
|
(37.4)
|
|
7.4
|
|
|
|
|
Effect of exchange rate
changes on cash
|
0.9
|
|
(3.1)
|
|
|
|
|
Net increase in
cash, cash equivalents and restricted cash
|
84.0
|
|
37.0
|
|
|
|
|
Cash, cash equivalents
and restricted cash - beginning of period
|
67.2
|
|
45.4
|
|
|
|
|
Cash, cash
equivalents and restricted cash - end of period
|
$
151.2
|
|
$
82.4
|
|
|
Modine Manufacturing
Company
|
|
|
|
|
|
|
|
Segment operating
results (unaudited)
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Nine months ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales:
|
|
|
|
|
|
|
|
Climate
Solutions
|
$
242.5
|
|
$
248.6
|
|
$
790.1
|
|
$
748.9
|
Performance
Technologies
|
323.0
|
|
317.8
|
|
1,033.6
|
|
952.1
|
Segment
total
|
565.5
|
|
566.4
|
|
1,823.7
|
|
1,701.0
|
Corporate and
eliminations
|
(4.1)
|
|
(6.4)
|
|
(19.4)
|
|
(21.2)
|
Net
sales
|
$
561.4
|
|
$
560.0
|
|
$
1,804.3
|
|
$
1,679.8
|
|
|
Three months ended
December 31,
|
|
Nine months ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Gross
profit:
|
$'s
|
% of
sales
|
|
$'s
|
% of
sales
|
|
$'s
|
% of
sales
|
|
$'s
|
% of
sales
|
Climate
Solutions
|
$
66.1
|
27.3 %
|
|
$
54.8
|
22.0 %
|
|
$
206.9
|
26.2 %
|
|
$
162.5
|
21.7 %
|
Performance
Technologies
|
61.0
|
18.9 %
|
|
43.0
|
13.5 %
|
|
182.4
|
17.6 %
|
|
115.2
|
12.1 %
|
Segment
total
|
127.1
|
22.5 %
|
|
97.8
|
17.3 %
|
|
389.3
|
21.3 %
|
|
277.7
|
16.3 %
|
Corporate and
eliminations
|
0.2
|
-
|
|
(0.2)
|
-
|
|
1.0
|
-
|
|
(0.5)
|
-
|
Gross
profit
|
$
127.3
|
22.7 %
|
|
$
97.6
|
17.4 %
|
|
$
390.3
|
21.6 %
|
|
$
277.2
|
16.5 %
|
|
|
Three months ended
December 31,
|
|
Nine months ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Operating
income:
|
|
|
|
|
|
|
|
Climate
Solutions
|
$
38.8
|
|
$
30.2
|
|
$
127.7
|
|
$
89.9
|
Performance
Technologies
|
31.2
|
|
17.4
|
|
96.8
|
|
41.1
|
Segment
total
|
70.0
|
|
47.6
|
|
224.5
|
|
131.0
|
Corporate and
eliminations
|
(8.3)
|
|
(8.1)
|
|
(30.6)
|
|
(29.1)
|
Operating
income
|
$
61.7
|
|
$
39.5
|
|
$
193.9
|
|
$
101.9
|
Modine Manufacturing
Company
|
|
|
|
|
|
|
|
Adjusted financial
results (unaudited)
|
|
|
|
|
|
|
|
(In millions, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Nine months ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net earnings
|
$
45.1
|
|
$
24.7
|
|
$
137.3
|
|
$
63.3
|
Interest
expense
|
5.8
|
|
5.9
|
|
17.8
|
|
14.7
|
Provision for income
taxes
|
10.3
|
|
8.5
|
|
37.8
|
|
19.8
|
Depreciation and
amortization expense
|
13.4
|
|
13.4
|
|
41.1
|
|
40.7
|
Other expense –
net
|
0.5
|
|
0.4
|
|
1.0
|
|
4.1
|
Restructuring expenses
(a)
|
1.6
|
|
0.1
|
|
2.1
|
|
2.2
|
Gain on sale of assets
(b)
|
(4.0)
|
|
-
|
|
(4.0)
|
|
-
|
Environmental charges
(c)
|
1.2
|
|
0.3
|
|
2.4
|
|
1.8
|
Adjusted
EBITDA
|
$
73.9
|
|
$
53.3
|
|
$
235.5
|
|
$
146.6
|
|
|
|
|
|
|
|
|
Net earnings per share
attributable to Modine shareholders - diluted
|
$
0.83
|
|
$
0.46
|
|
$
2.55
|
|
$
1.20
|
Restructuring expenses
(a)
|
0.02
|
|
-
|
|
0.03
|
|
0.04
|
Gain on sale of assets
(b)
|
(0.13)
|
|
-
|
|
(0.13)
|
|
-
|
Environmental charges
(c)
|
0.02
|
|
0.01
|
|
0.03
|
|
0.03
|
Debt amendment costs
(d)
|
-
|
|
0.01
|
|
-
|
|
0.01
|
Adjusted earnings
per share
|
$
0.74
|
|
$
0.48
|
|
$
2.48
|
|
$
1.28
|
|
|
(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
nine months of fiscal 2024 and fiscal 2023 was $0.5 million and
$0.3 million, respectively.
|
|
|
(b)
|
The Company's sale of
three automotive businesses based in Germany closed on October 31,
2023. As a result of the sale, the Company recorded a $4.0
million gain on sale at Corporate during the third quarter of
fiscal 2024. The tax benefit associated with the sale totaled
$3.1 million.
|
|
|
(c)
|
Environmental charges,
including related legal costs, are recorded as SG&A expenses at
Corporate and relate to a previously-owned U.S. manufacturing
facility. The tax benefit related to environmental charges
during the first nine months of fiscal 2024 and fiscal 2023 was
$0.6 million and $0, respectively.
|
|
|
(d)
|
In fiscal 2023, the
Company amended and extended its primary debt agreement in the
U.S. In connection with the credit agreement modification,
the Company recorded $0.7 million of costs as interest expense
during the third quarter of fiscal 2023. There was no tax
benefit associated with these costs.
|
Modine Manufacturing
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment adjusted
financial results (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2023
|
|
Three months ended
December 31, 2022
|
|
Climate
Solutions
|
|
Performance
Technologies
|
|
Corporate and
eliminations
|
|
Total
|
|
Climate
Solutions
|
|
Performance
Technologies
|
|
Corporate and
eliminations
|
|
Total
|
Operating
income
|
$ 38.8
|
|
$
31.2
|
|
$
(8.3)
|
|
$
61.7
|
|
$ 30.2
|
|
$
17.4
|
|
$
(8.1)
|
|
$
39.5
|
Depreciation and
amortization expense
|
5.6
|
|
7.5
|
|
0.3
|
|
13.4
|
|
5.2
|
|
8.1
|
|
0.1
|
|
13.4
|
Restructuring expenses
(a)
|
1.4
|
|
0.2
|
|
-
|
|
1.6
|
|
-
|
|
0.1
|
|
-
|
|
0.1
|
Gain on sale of assets
(a)
|
-
|
|
-
|
|
(4.0)
|
|
(4.0)
|
|
-
|
|
-
|
|
-
|
|
-
|
Environmental charges
(a)
|
-
|
|
-
|
|
1.2
|
|
1.2
|
|
-
|
|
-
|
|
0.3
|
|
0.3
|
Adjusted
EBITDA
|
$ 45.8
|
|
$
38.9
|
|
$
(10.8)
|
|
$
73.9
|
|
$ 35.4
|
|
$
25.6
|
|
$
(7.7)
|
|
$
53.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$ 242.5
|
|
$
323.0
|
|
$
(4.1)
|
|
$
561.4
|
|
$
248.6
|
|
$
317.8
|
|
$
(6.4)
|
|
$
560.0
|
Adjusted EBITDA
margin
|
18.9 %
|
|
12.0 %
|
|
|
|
13.2 %
|
|
14.2 %
|
|
8.1 %
|
|
|
|
9.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
December 31, 2023
|
|
Nine months ended
December 31, 2022
|
|
Climate
Solutions
|
|
Performance
Technologies
|
|
Corporate and
eliminations
|
|
Total
|
|
Climate
Solutions
|
|
Performance
Technologies
|
|
Corporate and
eliminations
|
|
Total
|
Operating
income
|
$ 127.7
|
|
$
96.8
|
|
$
(30.6)
|
|
$
193.9
|
|
$ 89.9
|
|
$
41.1
|
|
$
(29.1)
|
|
$
101.9
|
Depreciation and
amortization expense
|
16.5
|
|
23.8
|
|
0.8
|
|
41.1
|
|
16.0
|
|
23.9
|
|
0.8
|
|
40.7
|
Restructuring expenses
(a)
|
1.7
|
|
0.4
|
|
-
|
|
2.1
|
|
0.3
|
|
1.9
|
|
-
|
|
2.2
|
Gain on sale of assets
(a)
|
-
|
|
-
|
|
(4.0)
|
|
(4.0)
|
|
-
|
|
-
|
|
-
|
|
-
|
Environmental charges
(a)
|
-
|
|
-
|
|
2.4
|
|
2.4
|
|
-
|
|
-
|
|
1.8
|
|
1.8
|
Adjusted
EBITDA
|
$ 145.9
|
|
$
121.0
|
|
$
(31.4)
|
|
$
235.5
|
|
$
106.2
|
|
$
66.9
|
|
$
(26.5)
|
|
$
146.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$ 790.1
|
|
$
1,033.6
|
|
$
(19.4)
|
|
$
1,804.3
|
|
$
748.9
|
|
$
952.1
|
|
$
(21.2)
|
|
$
1,679.8
|
Adjusted EBITDA
margin
|
18.5 %
|
|
11.7 %
|
|
|
|
13.1 %
|
|
14.2 %
|
|
7.0 %
|
|
|
|
8.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
See the Adjusted EBITDA reconciliation
above for information on restructuring expenses and other
adjustments.
|
|
|
|
|
|
|
Net debt
(unaudited)
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2023
|
|
March 31,
2023
|
|
|
|
|
Debt due within one
year
|
$
19.7
|
|
$
23.4
|
|
|
|
|
Long-term
debt
|
313.5
|
|
329.3
|
|
|
|
|
Total debt
|
333.2
|
|
352.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: cash and cash
equivalents
|
149.7
|
|
67.1
|
|
|
|
|
Net
debt
|
$
183.5
|
|
$
285.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
(unaudited)
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Nine months ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash provided by
operating activities
|
$
64.2
|
|
$
11.8
|
|
$
175.0
|
|
$
67.9
|
Expenditures for
property, plant and equipment
|
(17.6)
|
|
(12.2)
|
|
(43.8)
|
|
(35.2)
|
Free cash
flow
|
$
46.6
|
|
$
(0.4)
|
|
$
131.2
|
|
$
32.7
|
|
|
Kathleen Powers
(262) 636-1687
kathleen.t.powers@modine.com
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SOURCE Modine