• |
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
|
• |
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
|
• |
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.
|
Fiscal 2024
|
Current Outlook
|
Net Sales
|
+6 percent to 11 percent
|
Adjusted EBITDA
|
$285 to $300 million
|
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
|
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
|
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
|
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
|
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.
|
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.
|
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
|
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
|
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
|